Episode summary
Micron Sales Forecast Tops Estimates on Insatiable Memory Demand | Bloomberg Businessweek
Bloomberg Businessweek Daily
· · 43 min · Hosts: Carol Massar, Tim Stenovec · Guests: Ed Ludlow, Jake Silverman, Katie Hubbard, Ellen Wald, Len Tannenbaum, James Crombie
Summary
Micron’s blowout outlook set the tone for the episode: the host and guests said the company’s $50 billion fiscal fourth-quarter revenue guide, far above the $43.2 billion estimate, showed how AI-driven memory shortages are giving Micron, Samsung, and SK Hynix real pricing power. Ed Ludlow argued that the standout issue was not just demand, but the scale of Micron’s margins and the possibility that revenue growth is being driven more by pricing than by unit growth. Jake Silverman said the key investor question is whether those margins are sustainable, since prior cycles peaked far lower and the current environment looks unusually tight on supply.
The conversation then broadened to housing, where Katie Hubbard said builders are more bullish than the weak new-home-sales headline suggests, but are behaving more selectively, favoring finished lots and build-to-order homes over speculative construction. She said entry-level affordability remains the biggest constraint, while higher-end homes are still selling well, especially in less regulated Sun Belt markets. On policy, she said federal efforts help at the margin, but local zoning, permitting, and regulation matter more.
Later, Ellen Wald said lower oil prices reflect clearing backlogs and improving sentiment, not a fully normalized market, and warned shipping through the Gulf remains vulnerable. The final segment turned to private credit, where Len Tannenbaum said withdrawals and mark pressure are likely to continue, especially in software-heavy portfolios, even as he saw opportunity in lower middle-market lending.
Key takeaways
- The host and Ed Ludlow said Micron’s $50 billion revenue guide and 86% margin signal extraordinary pricing power in AI memory chips.
- Jake Silverman said memory margins above 85% may not be sustainable if pricing eases, because prior cycles peaked near 60%.
- Katie Hubbard said builders are still buying finished lots, but they are leaning toward build-to-order homes and smaller product because affordability is weakening entry-level demand.
- Hubbard said federal housing policy cannot fix the supply shortage without faster local zoning, permitting, and deregulation.
- Ellen Wald said lower oil prices reflect backlog clearing and sentiment, but shipping risk through the Gulf of Hormuz remains elevated.
- Len Tannenbaum said private credit withdrawals and markdown pressure are likely to persist, especially where software assets and leverage are high.
Notable quotes
“The sales forecast topped Wall Street estimates and AI fueled shortages of the components sent prices soaring”
“historically like the memory makers have struggled to maintain margins or at least continue to expand margins um infinitely in cycles”
“what we're actually seeing is that builders are more bullish than those headlines are suggesting”
“the vast majority of the price of a gallon of gasoline comes from the price of a barrel of oil, but that's not the only issue”
“This is going to continue. I mean, uh, we were at the Decker conference yesterday, uh, with BDC's and private credit”
How the episode opens
Bloomberg Audio Studios, podcasts, radio, news. — This is Bloomberg Business Week Daily reporting from the magazine that helps global leaders stay ahead with insight on the people, companies, and trends shaping today's complex economy. Plus, global business, finance, and tech news as it happens. The Bloomberg Business Week Daily podcast with Carol Masser and Tim Stenc on Bloomberg Radio.
All right, safe to say we've got a new top story. Micron Technology uh that company out with their numbers just moments ago. Stock uh continuing to trade higher here in the aftermarket, pretty much near its best levels here uh after the trade of the regular session. Uh Tim, right now up about eight eight and a half% almost.
Yeah, it's the largest US maker of computer memory chips. The sales forecast topped Wall Street estimates and AI fueled shortages of the components sent prices soaring. In terms of numbers here, why we're seeing shares in the after hours higher by about 8%.
Uh 50 billion in the fiscal fourth quarter that runs through August. Analysts estimated 43.2 billion. Remember this is all about the AI spending spree from data center operators.
There were questions about what this would look like after some of the volatility that we saw, especially in Korea with Samsung and SKH Highix. But it looks like at least for now, at least in the short term, investors questions have been answered. But let's wait for the call.
It's interesting. Western Digital now up about 5 a.5%. I looked at Nvidia, it's just up about 7/10en of a percent, but you are seeing certainly some reaction in some other names in the space. Let's get to it with our team. Lucky for us, with us, Ed Ledllo, the host of Bloomberg Tech.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai memory demand
- semiconductor earnings
- hbm memory
- private credit
- us housing market
Companies and tickers mentioned
- MU
- SSNLF
- Micron Technology
- Samsung Electronics
- SK Hynix
- Walton Global
- Transversal Consulting
- Atlantic Council
- Tannenbaum Capital Group
- Bloomberg Intelligence
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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