00:00We begin with the big risk event of the day. Micron shares up nearly 300% this year ahead of
00:05earnings, which will tell investors if demand for AI chips is holding up. Bloomberg Tech host
00:10Ed Ludlow joins us now from San Francisco. And it feels like increasingly with every day that
00:15goes by, Micron is becoming a very important pillar for not just the AI trade, but this overall
00:20market. And how the earnings of Micron attract is highly analogous with the story we have with
00:25NVIDIA from like 2022 to basically present day. So for the fiscal third quarter, the expectation is
00:31that revenues will be up almost 300% from last year and that net income will be up almost 1200%,
00:381,200%. That's in the quarter gone. It will still rest on how bullish the outlook is because memory
00:46is still the key bottleneck on the data center build out right now. You have to have a sort of
00:52corresponding number of high bandwidth memory placed around the GPU at the tray level. And
00:58so that's the simple equation. And just as we track the capital expenditure of the hyperscalers
01:04going towards NVIDIA, Micron is also a great recipient of that. So it's a very similar story
01:09where the bar will be super high.
01:10You know, we were just talking with Jake Silverman from BI about the fact that this company, as
01:15with many other chip makers, is supply constrained. They could sell anything else that they make.
01:20What are they going to do to boost supply? Will we hear something about that on the call? And by
01:26the way, are any high bandwidth memory makers putting fabs in the US?
01:31Well, what will they do? What are they doing? Micron is already trying to expand
01:37its capacity in the United States on the East Coast where you guys are, right? That is happening.
01:41What's so interesting about Bloomberg Intelligence and Jake Silverman is that historically memory,
01:47whether it's just simply DRAM or high bandwidth memory, which is DRAM stacked on top of each other,
01:52has been highly cyclical. And the debate in industry is whether this run-up in demand for
01:59high bandwidth memory is infinite, or if it will have boom-bust cycles as memory has traditionally
02:03done. And Jake Silverman is in the camp without speaking on his behalf where this will still be
02:08cyclical in nature. So the concern for the memory makers themselves is what if they overbuild capacity,
02:14and then the demand goes away and they're left with all of these facilities that aren't running.
02:18The economics of memory making are similar to chip making. You need very high yield and full
02:24utilization of the fab to make the numbers go in your favor.
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