Artificial intelligence is inspiring companies to make massive capital investments. Much of that money is earmarked for companies that produce essential hardware components to run AI-based applications and harness the data needed to produce the most valuable insights. For the companies that specialize in producing these components, every piece of news boasting another multibillion-dollar investment in AI is cause for celebration.

Micron technology (name: mu) has put itself in exactly that position as an essential supplier of memory chips for AI hardwareand yesterday, the first article in this series on Micron for al Voyager Wallet looked at the inspiring story of the company and its rise to the top of the tech industry. Today you’ll learn more about Micron’s financial results and why the best of times could still be well ahead.

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One thing investors can learn a lot from Micron’s financial results is that when you start a comparison it makes a big difference. The following two narratives are completely true, but they paint very different pictures of Micron’s growth:

• Over the past 12 months, Micron’s revenue has been nearly triple what it was in the company’s 2023 fiscal year. The semiconductor memory chip maker has turned from a huge loss of $5.8 billion three years ago to net income of $11.9 billion over the past four quarters. Margins have enjoyed explosive growth.

• Micron’s sales are up just under 40% from the chipmaker’s strong year in fiscal 2022. Operating and profit margins have recently returned to levels four years ago, and the 37% increase in net income, while solid, seems out of proportion to the stock’s much larger gains over the same period.

The way to reconcile these two views is to understand that historically, Micron’s memory chip business has followed the ups and downs of the technology business cycle. At certain times, Micron’s chips are in high demand, and the high prices it is able to command for the chips it is able to produce cause Micron to make investments to increase capacity. Inevitably, however, this increase in demand has been followed by a softening of the Micron component market. At this point, as we saw during the bear market in calendar 2022, selling can take a big hit. So it’s crucial to make sure that when comparing Micron’s recent results to older numbers, it’s measured peak-to-peak or bottom-to-bottom. At the very least, avoiding mismatched comparisons prevents embarrassing miscalculations about what the future is likely to demand.