Thu, Mar 19, 2026|Whitney Tilson

Updates on Micron Technology, OpenAI, Five Below, and Lululemon Athletica; Disgraced former Nikola CEO Trevor Milton mounts his comeback; How to protect yourself from targeted financial scams

1) Today, I'd like to give several quick updates on companies and topics I've been writing about recently...

First, white-hot chipmaker Micron Technology (MU) reported blowout earnings after the close yesterday (see the press release here and presentation here).

Thanks to the AI-driven data-center boom, year-over-year revenues tripled to $23.9 billion, far above estimates of $20.1 billion.

Adjusted earnings per share ("EPS") soared nearly eightfold to $12.20, also crushing estimates of $9.31.

Guidance for next quarter was similarly strong, with revenues expected to be $32.75 billion to $34.25 billion versus estimates of $24.3 billion. And adjusted EPS is expected to be $18.75 to $19.55 versus estimates of $12.50.

Despite the strong report, the stock was down slightly this morning. Perhaps it's just taking a breather after its extraordinary run-up over the past year, as you can see in the chart below:

But it also likely has to do with what I warned about in my January 22 e-mail:

So, [Mircon's] earnings are exploding, yet the multiple on the stock is less than half that of the S&P 500 Index. You might be thinking, "Let's buy!"

Not so fast...

While I'm a big believer in AI (as I've discussed in many previous e-mails), I'm very concerned that AI spending is in a bubble... And if there's a pullback, [one] of the first companies – and stocks – to get whacked will be Micron...

As I concluded then, I would never short the stock, as it could easily double again. But I also wouldn't buy it here, as there's a high risk it could get caught up in the bursting AI bubble.

But what if I owned Micron and was sitting on big profits? As I said:

That's a tough one because, as I've written many times before, you need to let your winners run.

So that's what I would do... but with a series of stop losses to make sure I didn't give back all of my gains.

My conclusion remains the same now as back then.

2) One of the main reasons I'm concerned about companies exposed to AI is that I'm more bearish than ever about one of the largest players in the sector, ChatGPT owner OpenAI.

These two articles in the Wall Street Journal smack of a company under enormous stress:

For reasons I've outlined previously (archive here), plus this recent news, I think OpenAI is going to implode by the end of the year.

3) Discount retailer Five Below (FIVE) also reported blowout earnings after the close yesterday...

Revenues were up a better-than-expected 24% to $1.73 billion, mainly due to a 15.4% increase in same-store sales. Adjusted EPS of $4.31 also rose 24%, handily beating estimates of $4.

Guidance for next quarter and the full year was also strong. As a result, the stock was up as much as 10% this morning.

I nailed this stock a year ago on April 4 when, amid the "Liberation Day" panic, I wrote: "This is still a good company, and its stock would be a huge beneficiary if Trump eased the tariffs." Since then, the stock has quadrupled.

The stock is trading around $235 as I write, and updated guidance for adjusted earnings per share this year is $8. That means it's trading at 29.4 times forward earnings, in line with its historical range.

At these levels, if I owned Five Below, I might consider selling half and riding the remainder.

4) Athleisure-apparel maker Lululemon Athletica (LULU) reported earnings after the close on Tuesday, and the stock jumped 3.8% yesterday.

Adjusting for currency fluctuations and an extra week last year, revenues ticked up 2%, in line with estimates.

But its gross margin tumbled 550 basis points, reflecting increased competition. And expenses rose 4%, leading to a 660-basis-point decline in operating margin, from 28.9% to 22.3%.

This was partially offset by share repurchases, which reduced the diluted shares outstanding by 3.9%. But EPS still fell by 18.4%.

Guidance was also weak, with next quarter's EPS expected to be $1.63 to $1.68, well below estimates of $2.07. And full-year EPS is expected to be $12.10 to $12.30, below estimates of $13.10.

The stock opened this morning at $163.29, and the midpoint of 2026 earnings is $12.20. That means LULU is trading at a modest 13.4 times forward earnings.

I last wrote about the stock on December 19, when I shared insights from friends who know the company well. And I correctly concluded that I would "continue to stay on the sidelines."

But with the stock down more than 20% since then, might it be time to buy?

I think not...

As this article in Monday's New York Times notes, the company faces fierce competition, both from established giants – like Adidas, Gap, and Nike – and two scrappy upstarts, Alo Yoga and Vuori:

Alo, based in Los Angeles, drew shoppers with celebrity influencers, like Kendall Jenner and Bella Hadid, as well as with its off-duty California look. The business first broke $1 billion in revenue in 2022. Vuori, from Encinitas, Calif., found fans by offering performance fabrics with a laid-back aesthetic. Analysts estimated that Vuori had $1 billion in sales in 2024.

As both brands opened stores across North America, they chose spots close to Lululemon, popping up in the same malls from California to Florida. Alo even opened one near Lululemon's headquarters in Vancouver.

All three brands moved into flagships within a few hundred feet of one another on the same street in Manhattan...

On a recent day at the store, it was evident that the competition had closed in and that Lululemon had to fight for every shopper.

I want to see how things play out with the company's founder, Chip Wilson, who "has publicly castigated management and feuded with the board of directors," and activist investor Elliott Investment Management.

If they bring in an outstanding CEO, I might be tempted to reconsider and take another look at the stock...

5) This cover story in the WSJ highlights how disgraced, imprisoned, and then pardoned Trevor Milton, the man behind the scam that was electric-truck maker Nikola, is "now raising funds for a new jet he claims will transform flying":

Investor documents said that SyberJet is seeking to raise $1 billion from investors and claimed the company currently has a valuation of $4 billion...

Milton, a college dropout turned serial entrepreneur, has had a mixed record with all his businesses. What's left of Nikola is suing him, while several of his other startups, including an e-commerce site called uPillar.com and another truck startup, failed to deliver a product, burned through investor cash or became entangled in litigation.

I warned my readers about Nikola dozens of times in the past (archive here). And I confidently predict that anyone who invests in this new venture is sure to lose all of their money.

Thankfully, however, SyberJet, unlike Nikola, isn't a public company. So average Americans won't get taken for another ride by Milton.

6) But there are so many other ways they can get scammed – a topic about which I never tire of writing...

Sadly, older adults are especially vulnerable. That's why I read this WSJ article with interest, which outlines how to protect yourself from these targeted financial scams:

Set boundaries. People should set limits on financial transfers with their banks, brokerages, and other firms. They should also direct all unknown callers to voicemail and make sure antivirus and security software are up to date...

Stop and think. One of the most effective anti-scam strategies is to resist the urge to act quickly, which can be one of the scammers' most effective tools. Pressure to act "before something bad happens" can cause people to shut down further critical thinking...

Take action. Quickly reporting fraud to police can sometimes stop a scam before money is lost...

With technology constantly evolving, especially AI, it can be difficult to assess when something is real or fake. Impersonators and bad actors are everywhere. So taking these steps is more important than ever to safeguard your finances.

Best regards,

Whitney

P.S. I welcome your feedback – send me an e-mail by clicking here.