Micron's Operating Margin Surged Past 80% for the First Time Ever. History Says This Is What's Coming Next.
The memory chip market is cyclical, but this time may be different.
Overview
Micron (NASDAQ: MU) is one of the three leading names in the memory chip space. It produces both DRAM and high-bandwidth memory, and its fingers are on the pulse of the whole tech industry due to its size and breadth. Recently, it set a new operating margin record, which one might naturally view as a positive. However, that fact should be raising some red flags for investors.
Why? Well, the memory chip industry is cyclical, and normally, once its margins reach a peak, it's time to get out. But is that the case here? After all, this is the biggest up phase of a cycle Micron has ever seen. Well, I expect that history has some valuable lessons to teach.
Image source: The Motley Fool.
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Originally published at www.fool.com.