MU · investment memo
Post-SCA FY2031 mid-cycle EBIT margin, built from an opex bridge on EDGAR-verified actuals: 46.0% terminal gross margin - 5.5% R&D - 2.5% SG&A - 0.0% other = 38.0%. Bridge reproduces FY2025 (26.41% vs 26.14% actual) and 9M FY2026 (70.46% vs 70.40% actual). Constraint 38.0 <= 46.0 satisfied.
Four distinct questions, one field each. A price is not a thesis: the trigger below forces a re-underwrite and freezes further purchases — it is never an automatic sell.
A daily close below $554.25 triggers a mandatory re-underwrite and freezes further purchases. It is not an automatic sell unless a separate fundamental invalidation condition has been breached.
Not stated. This name has no falsifiable invalidation conditions on file, so it cannot be risk-monitored. That is a gap in the research, not a clean bill of health — recorded rather than hidden.
Named cause: the CY2027 supply wave arrives into a decelerating AI-capex cycle, and the SCA ceilings — not the floors — turn out to be the binding constraint. Mechanism, in order: 1. MU's own >$40bn FY2027 capex plus industry additions land from 1H CY2027. 2. Commodity DRAM/NAND spot prices break first, because ~60–75% of the book is unprotected. 3. The SCA ceilings ("at the current CQ2 market price") cap MU's participation on ~40% of revenue in the *good* state while the floors only protect it in the bad state — an asymmetry that is valuable in a downturn and costly in a melt-up. 4. Reported