Micron's Stock Gains on Lenovo's Memory Price Surge, but DeepValue Report Highlights Valuation and Execution Risks

What happened

On February 12, 2026, Micron's stock climbed after Lenovo reported memory price increases of 40-50% in the last quarter, with potential to double this quarter, reinforcing the AI-driven memory tightness narrative. This aligns with DeepValue's master report, which notes Micron's $410 share price embeds sustained peak-like DRAM pricing, forecasted to rise 55-60% QoQ in Q1 2026. However, the report warns that Micron faces critical execution risks, including HBM4 qualification under Nvidia's specs and heavy capex funded by conditional incentives. With no margin of safety at current valuations, investors are balancing near-term optimism against long-term cyclicality and competitive threats. The stock's movement reflects market sentiment tied to pricing momentum, but fundamental checks on HBM4 and pricing durability remain pending over the next 1-2 quarters.

Implication

Lenovo's report signals strong near-term pricing power, likely supporting Micron's Q2 2026 guidance of $18.7B revenue and 67% gross margin, but at a P/E of 38.8x, the stock prices in perfection with no room for error. DeepValue's WAIT rating underscores the need for confirmation on HBM4 mass production by late Q1 2026 and sustained DRAM pricing after the current spike, as any slippage could trigger a sharp correction. The report highlights that roughly 50% of revenue comes from top customers with renegotiable contracts, increasing vulnerability if pricing overshoots and leads to buyer pushback. Additionally, Micron's ~$20B FY26 capex plan, dependent on incentives, raises funding risks before new capacity contributes in 2027, compounding cyclical pressures. Prudent investors should wait for clearer signals on these catalysts, considering the attractive entry point at $320 identified in the report, to mitigate downside from potential multiple compression.

Thesis delta

The Lenovo announcement strengthens evidence for near-term memory pricing strength, aligning with DeepValue's base scenario and increasing the probability that tightness persists through Q2 2026. However, it does not alter the core thesis risks around HBM4 qualification delays, capex dependency, or valuation sensitivity to pricing inflection. Thus, the overall WAIT recommendation remains unchanged, with the news serving as a reinforcing data point rather than a catalyst for immediate investment action.