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- What the Expect this Week 9/22
Welcome to offtheticker - thanks for following along. WOW what a good last week in the market. We love a booming market! If you have been following us for a while you will know that we had some great wins the past couple of weeks with $NBIS, $ORCL, and $GRAB. Congrats to our subscribers that have been following along. As we do every week in our earnings report is report on stocks that are reporting earnings this week. This week we are going to go through Micron and Costco as we give you our analysis and if we hold them/will buy them for our portfolio.
Weekly Earnings Spotlight: September 22-26th, 2025:
Monday September 22nd: FLY (Firefly Aerospace Inc), EBS (Ennis Inc)
Tuesday September 23rd: MU (Micron), AZO (Autozone)
Wednesday September 24th: CTAS (Cintas Corporation)
Thursday September 25th: COST (Costco Wholesale Corporation), ACN (Accenture)
Micron
Recent Highlights
Micron is set to release earnings Tuesday September 23rd, 2025. It has been on a big run recently, YTD is up 92%. It has been riding strong momentum from the increased demand for memory and storage driven AI data centers, and cloud infrastructure. Analysts have kept raising the price targets of Micron because of the improved pricing of their products DRAM and NAND, and the high bandwidth memory use in AI hardware. You can see from Micron’s previous earnings report the breakdown of what percentage of revenue comes from each of their product segments. This is an important detail to highlight when discussing their business mix and product performance.
In Q3 Micron had revenues of about 9.3 billion, which was a 37% year over year increase mostly from AI demand. For this upcoming quarter revenue estimates are around $11.1 billion which is a high raise. We think that Micron will hit their revenue mark as the AI market is booming right now. They keep preaching about their increase in pricing dynamics and it has really shown. Management has talked about how they have a good supply chain management for demand which is something that we think is key. So many AI companies have these big deals but not the capacity to meet some of these bigger companies requests.
However there are some risk factors. The biggest thing that we are looking at with risk is the macroeconomic pressures (costs, supply chain, trade policy), and competition. Competition like Samsung and SK Hynix are also ramping up their HBM production and maintain pricing power in DRAM. If supply in the industry expands then average selling prices could change. Which as you can see DRAM is 75% of their revenue so it could really effect them.
Investment Thesis
Micron is looking like a very compelling growth stock right now, especially people who believe in the long term demand from AI and cloud infrastructure. Its strong position comparably in DRAM, and HBM gives us belief that they will continue to grow. There recent guidance bumps continue to encourage us and shows confidence from Micron about their long term value.
In the terms of risk/reward, much of the bad news for memory is well known (price pressures, inventory, competition) but we think the upside from a successful AI memory ramp is big. If Micron continues to meet or exceed their guidance there stock may still have some room to climb. However a miss could send it going the other way or unexpected macro issues we mentioned above.
To us as the current price levels, we are not buying. We like Micron as a long term option however the market has been nothing but green. We could see some red days this week and if it falls around $150 we will buy a small amount. However to us we see how Micron offers growth in AI memory demand while also improving margin structure and scale. We will likely buy if they once again have a big increase in expected revnue during their earnings announcement.
Costco:
Recent Highlights
Costco is set to release earnings on Thursday, September 25, 2025. The company has shown great momentum heading into earnings with their consumer demand and membership driven business model growth. We love Costco as it is very feasible when buying in bulk. Their membership model is a great way to bring in revenue and gets people to come back as it is a big contributor to profits. In the previous quarter they reported net sales around $63 billion which is an increase of 8% year over year. Looking to competition comparable stores sales grew about 5.7% globally, with the U.S. leading around 6.6%. The company is expanding their footprint globally which is something we love to see with any company as this will increase their footprint and brand.
In recent months, August sales came in very strong with net sales rising 8.7% year over year and same store sales about 6.3% which slightly beat some analysts expectations. One of the biggest thing that Costco is seeing growth in, is online ordering. Neither of us have ever used this method when buying something from Costco but can see with how with consumer trends are changing that this would increase.
However, with how much we love Costco there are some cost pressures. Increased transportation, labor, merchandise costs and tariff related issues remain in play. With membership renewal rates are high, many analysts think that they will raise prices soon which could deter many consumers. Do we think that they will ever raise prices enough to decrease their loyal fan base no - but it could be a short term issue reflected in the stock price.
Recent Highlights
We view Costco as a good defensive growth stock in the retail space. We are not have a big presence in this area within our portfolio but this stock remains the highest in it. Their membership model creates a great revenue stream, which shows some predictability. The combination of relative stable same stores growth, strong online expansion, and performance on grocery gives them lots of different pillars of strength to us. Something that Costco has over smaller stores is being able to absorb many cost shocks. It can push back on suppliers, manage tariff sourcing strategy, and optimize their supply chain when needed. Costco has a very strong loyal customer base which is something that is really needed with this business model. You can do quite anything with Costco with their travel portal to buying tires etc.
Along with Micron, we will also be looking to see if Costco can deliver on their net sales targets and maintain their margin goals. However risk remain: inflation, interest rates, consumer cost of living could have consumers spending less. In the retail market one of the main things we look at is competition. We like comparing the valuation of Costco with other retail stocks to see how much potential it could have. Unlike AI stocks, in the retail market there is only so much more revenue you can do that is not totally unexpected. With these AI stock recently they have been skyrocketing due to deals with bigger companies for billions of dollars. Costco does not really have that option, let alone many retail companies. With that said Costco has a already relative high valuation compared other retailers.
Given all of these, Costco does look like a solid long term hold in our portfolio, as we have loved to own this stock as fans of Costco and felt like we needed to own a little in the retail market. We know that Costco is always going to be there and while it might not deliver explosive gains, its downside is somewhat cushioned by the business model and pillars mentioned above.
Thanks for reading along and keep an eye out for our favorite stock analysis this week. We hope you have a great week!
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