Track market-moving stories before they get noisy

Micron Technology Inc. (MU, Financials), the memory and storage chipmaker, could benefit from a market that is still struggling to produce enough chips for the

Ken Griffin's Citadel posted strong gains across its major hedge funds in July, helped by a recovery in risk assets and a discounted purchase of assets from the collapse of Leopold Aschenbrenner's Situational Awareness to end the month, according to a person familiar with the firm's performance.

Citadel's flagship multistrategy Wellington fund, the firm's largest, returned 5.9% in July, marking its best monthly performance since 2022 and pushing 2026 gains to 12%, the person said. The tactical trading fund, which combines discretionary equity investing with quantitative strategies, gained 11.1% in July and is up 27% on the year. The equities fund advanced 14.2% last month, bringing 2026 return to 27%. Tactical fund and equities fund both had its best month ever. The person asked not to be identified discussing confidential performance figures.

The July gains came after Citadel acquired the bulk of the public-stock portfolio formerly held by Situational Awareness late last month, following the hedge fund's rapid unraveling after steep losses triggered margin calls and forced asset sales. Citadel purchased many of the holdings at a significant discount, positioning the firm to benefit as markets rebounded into the month-end.

Situational Awareness, founded by former OpenAI researcher Leopold Aschenbrenner, was forced to unwind many of its positions after a sharp reversal in artificial intelligence trades left it bleeding on both sides of its book. The firm had accumulated sizable stakes in AI infrastructure companies while betting against software stocks, a strategy that backfired as software shares rallied and AI hardware names slumped.

Several of the fund's prime brokers worked to reduce positions in an orderly fashion as Situational Awareness sought to meet margin requirements. Citadel emerged as one of the largest buyers of the portfolio, taking advantage of one of the year's biggest forced liquidations.

Stocks such as Nebius and Micron that Aschenbrenner's fund owned rebounded in the final days of July following a brutal month with many traders saying the fund's near collapse and rescue move by Citadel was a clearing event that caused short sellers to take profits.

Citadel managed about $71 billion in assets as of July 1 and has often used periods of market dislocation to deploy capital into distressed or forced-selling situations.

Citadel declined to comment.

Anthropic has already confidentially filed its initial public offering (IPO) prospectus with the Securities and Exchange Commission (SEC) and could go public as soon as October, according to some reports.

As a top AI company with a leading artificial intelligence (AI) model, the Anthropic IPO could certainly be popular with investors. But history shows that many IPO stocks gain just 4% in their first year, and additional research shows that three years out, they usually lag the market by about 4%.

This means it's likely that any initial surge of investor interest in Anthropic stock could peter out quickly.

Instead, putting your money into two tried-and-true AI stocks is probably a better bet. Here's why buying and holding Micron Technology (MU +7.61%) and Nvidia (NVDA +2.56%) is a smart move.

Image source: Getty Images.

Micron's memory is still very much in demand Micron's share price has been volatile lately as investors worry about whether the memory market can sustain more growth. They're not wrong to question some of the AI spending by large tech companies, but ignoring the huge demand for memory processors is a mistake.

Micron's CEO, Sanjay Mehrotra, said on the company's earnings call in June that he expects "tight conditions to persist" beyond 2027 due to AI-driven demand. This memory demand is what has spurred the company's sales and pushed Micron's gross margins up from 39% in the year-ago quarter to 85% currently.

Tech companies of all shapes and sizes can't get enough of the memory they need, and it's driving up prices and resulting in very impressive margins for Micron. The company's fiscal third-quarter results show just how well this is working in Micron's favor, with sales surging 345% to $41.5 billion and adjusted earnings per share (EPS) soaring more than 1,200% to $25.11.

And if that's not enough to convince you of just how much demand there is for Micron's memory processors, consider that the company has 16 signed contracts (referred to as Strategic Customer Agreements, or SCAs) worth more than $100 billion in total over their terms.

Management says the SCAs "significantly enhance the durability and predictability of Micron's strong financial performance" and that the final amount will likely be even higher because the initial contract prices are based on baseline memory prices, which are likely to rise.

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Nvidia is positioning itself to continue benefiting from AI Nvidia has been a winning AI stock for years, with its graphics processing units (GPUs) a central part of AI data centers, accounting for 86% of the AI data center GPU market.

As tech companies have ramped up their AI spending -- expected to reach roughly $750 billion this year alone -- Nvidia's sales and earnings have surged. The company's revenue rose 85% to $81.6 billion in Q1 of fiscal 2027, and adjusted earnings jumped 140% from the year-ago quarter to $1.87 per share.

Some investors have worried the best days may be behind Nvidia, but they're likely getting ahead of themselves. Nvidia CEO Jensen Huang said on the Q1 earnings call that "Demand has gone parabolic. The reason is simple: Agentic AI has arrived."

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The new focus on agentic AI and the tasks that it can perform has spurred Nvidia to develop its next-generation Vera central processing units (CPUs) for AI. Anthropic, Space Exploration Technologies, and OpenAI are evaluating the Vera CPUs right now, and Nvidia says the processor is twice as efficient and 50% faster for AI agents than silicon from Intel and AMD.

Nvidia is trying to spread its opportunities out with the Vera CPU by preparing for a potential wave of CPU sales for data centers as AI agents continue to expand.

If AI CPUs become the next big hardware boom, Nvidia appears poised to hop on the trend. Even if not, it can continue to benefit as the leading GPU designer for AI data centers.

SpaceX's earnings may have sent its shares sharply lower as investors fretted over the rise in AI spending, but CEO Elon Musk delivered a bullish message for one of the semiconductor industry's most volatile segments: memory chips.

Speaking during the company's earnings call, Musk argued that demand for memory chips is rising at a pace far exceeding global production, suggesting prices could remain elevated for years despite aggressive capacity expansion by manufacturers.

His comments reinforce the long-term investment case for companies such as Micron Technology, SK Hynix, and Samsung Electronics, all of which are racing to meet surging demand from artificial intelligence infrastructure.

The remarks also come as investors debate whether the current AI spending boom can sustain strong pricing for memory products, particularly high-bandwidth memory (HBM), which is essential for training and running advanced AI models.

Musk says memory remains the industry's biggest bottleneckMusk made the comments while responding to a question from JP Morgan analyst Doug Anmuth, who asked about supply-demand dynamics and whether SpaceX would be able to maintain its premium pricing.

"Look at the rate at which logic and memory is being produced. One must always consider the limiting factor here. The limiting factor currently is memory," Musk said.

"The memory output is increasing by around 20% per year. Now, normally, that would be fantastically fast and amazing for any large mature industry."

He contrasted that with the pace of demand growth.

"Ask yourself, is the demand increasing by 20% a year? No, the demand is increasing by 200% a year, maybe higher. If you have got demand increasing much faster than supply, Economics 101 would suggest that the price increases. It does not decrease."

The comments come as AI companies continue pouring billions of dollars into data centers equipped with graphics processors and advanced memory chips, creating sustained demand across the semiconductor supply chain.

Memory stocks remain volatile despite improving outlookMusk's statement comes at a time when memory stocks have experienced significant volatility in recent weeks.

Micron shares were down around 2% in premarket trading on Wednesday after gaining ground over the previous two sessions, while SK Hynix slipped roughly 3%.

Investor concerns have centred on whether hyperscale cloud providers could eventually slow their AI spending and whether Chinese memory producer CXMT could emerge as a stronger competitor.

Sentiment, however, has improved this week following stronger-than-expected earnings from Amazon, Microsoft, and Google, whose cloud businesses continued to report accelerating AI demand.

Broader market optimism surrounding easing tensions in the Middle East has also supported semiconductor stocks.

Industry forecasts continue to suggest that memory supply will struggle to keep pace with demand despite record investment.

According to Deloitte, the world's three largest memory manufacturers- Micron, Samsung, and SK Hynix- are expected to increase their combined capital expenditure by nearly 340% between 2024 and 2027 to expand production.

Memory-related investment could account for roughly half of total semiconductor industry capital expenditure by 2026.

Even so, Deloitte noted that additional capacity will take years to come online because new fabrication plants typically require three to five years to build and ramp up production.

The consulting firm expects hyperscale cloud providers to allocate around 30% of their 2026 data-centre investments to memory, with that share projected to rise to 36% in 2027.

Memory components also account for roughly one-quarter of the bill of materials for high-end AI server racks.

As a result, Deloitte forecasts global memory sales could exceed $1 trillion in 2027, compared with approximately $230 billion in 2025.

"The current memory supply tightness and elevated prices may persist until 2029 or even 2030, assuming continued demand among hyperscalers for memory chips. Other customers that need memory for devices such as PCs, smartphones, and other consumer electronics, as well as for non-AI data centres, will likely also need to contend with high memory prices," Deloitte said.

Musk's comments closely align with a bullish note issued by Bank of America this week, in which the brokerage reiterated its Buy rating on Micron and maintained a price target of $1,550, implying roughly 72% upside from Tuesday's closing price.

Analyst Vivek Arya acknowledged that memory pricing and margins would eventually normalise as new capacity enters the market between mid-2027 and 2028.

However, he argued that investors have become overly focused on a future downturn despite continued improvement in current industry fundamentals.

"Hyperscaler spending continues to rise despite higher component costs, suggesting semis/memory pricing power," Arya wrote.

Bank of America also noted that GPU rental rates remain close to record highs and that none of the major cloud providers has indicated memory shortages are constraining AI deployments.

The brokerage further dismissed concerns over Chinese manufacturer CXMT, arguing the company remains focused on commodity DRAM and does not currently pose a significant competitive threat in high-bandwidth memory used for AI workloads.

Ask most people to name the winners of the artificial intelligence (AI) boom and they reach for the chipmakers first. But the AI machine needs somewhere to put all the data it churns through, and that has turned memory into one of the hottest corners of the market.

Three names sit at the center of it: SK Hynix (SKHY +8.17%), Micron Technology (MU +7.61%), and Sandisk (SNDK +10.84%). The question worth asking is whether SK Hynix is quietly running away with the most valuable part of this race while everyone watches the chips.

Image source: Getty Images.

SK Hynix owns the crown jewel of AI memory To understand why SK Hynix looks like the front-runner, you have to understand what kind of memory matters most for AI. The prize is high bandwidth memory, or HBM, the stacked chips that sit right next to an AI accelerator and feed it data fast enough to keep it busy. It is the highest-value, fastest-growing slice of the memory world, and SK Hynix makes more of it than anyone else. The company held a position somewhere in the high 50% range of the HBM market in early 2026, and it has repeatedly been the first to qualify each new generation with Nvidia, the biggest buyer.

That lead is not just bragging rights. Being first and biggest in HBM means pricing power and the fattest margins in the business, because customers building AI systems care far more about getting the memory at all than about shaving a few dollars off the price. In the segment that matters most to AI, SK Hynix is the leader, and it has quietly turned that into the industry's best profitability.

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Micron is the fast-closing challenger That does not mean the race is over. Micron Technology has become the most credible threat, and importantly, it is the name U.S. investors can buy most easily as a pure play on this trend. Micron has climbed to roughly a fifth of the HBM market, passing Samsung for second place, and it has said its high bandwidth memory is effectively sold out well into the future. It also spans the full memory stack, making conventional DRAM and NAND flash alongside HBM, so it captures the broad upturn, not just the AI-specific part.

The gap with SK Hynix is real but worth watching. SK Hynix's share of HBM has actually slipped from around two-thirds a year earlier as rivals ramp up, and the next battleground, the coming HBM4 generation, could reshuffle the standings. Micron is not winning yet, but it is gaining ground, and it is the accessible way for many investors to own this theme.

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Sandisk is playing a different game entirely Sandisk belongs in this conversation, but it is fighting on a different front. It does not make HBM at all. It makes NAND flash, the memory used for storage in solid-state drives, and AI has set that market on fire, too. As models generate and consume enormous amounts of data, someone has to store it, and NAND prices have soared, with enterprise contract prices jumping sharply and Sandisk moving to roughly double the price of some high-capacity drives. AI servers now account for a large and growing share of NAND shipments.

So Sandisk is riding the same supercycle, just from the storage side rather than the compute side. That is a genuine tailwind, but NAND is a more commoditized, cyclical business than HBM, with less pricing durability once new supply arrives. It is a bet on the storage wave, not on the crown jewel.

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The takeaway for investors Is SK Hynix quietly winning? In the highest-value arena, HBM, the answer is largely yes, and that leadership is why it deserves to be the first name investors study for AI-memory exposure. Micron is the strong, more accessible challenger closing the gap and spanning the whole stack, while Sandisk offers a different flavor of the same trend through storage. The catch is that memory has always been savagely cyclical, and every one of these stocks can fall as hard as it rises once supply catches up with demand. To me, SK Hynix sits at the top of the heap today, but the smart move is to respect that cyclicality and treat any of these as one piece of a portfolio, not a one-way ticket.

Micron Technology Inc (NASDAQ:MU) remains a ‘Bu’y at Bank of America, which reiterated its $1,550 price target and viewed the recent pullback in the stock as an enhanced buying opportunity as end-demand, particularly from cloud and AI infrastructure, remains solidly on track.

Shares of Micron traded up 8% at about $895 on Tuesday afternoon, but remains down about 9% over the last month.

Bank of America analysts wrote that while memory prices and gross margins will eventually normalize as additional capacity arrives around mid-2027 through 2028, they believe the recent stock reset reflects investors positioning for an eventual downturn rather than a deterioration in current fundamentals.

The analysts highlighted several factors supporting their view, including the potential for Micron’s earnings to remain well above historical peaks even in a downturn, increasing use of long-term agreements, high GPU and HBM utilization and continued hyperscaler spending despite higher component costs.

Bank of America currently models calendar 2028 DRAM and NAND average selling prices declining 10% and 18% year over year, respectively, resulting in estimated EPS of about $150. Even under a bear-case scenario involving 30% and 40% declines in DRAM and NAND ASPs, respectively, the analysts believe Micron could generate roughly $100 in EPS.

That compares with a prior-cycle peak of about $12 in 2018, according to the analysts. A bull-case scenario with broadly flat ASPs in calendar 2028 would imply EPS of about $175, they wrote.

Bank of America also pointed to the growing use of long-term agreements as a factor that could improve supply and demand visibility, although the analysts acknowledged that LTAs may not prevent a downturn. Micron and Samsung have indicated that roughly 50% to 70% of capacity could eventually be covered by LTAs, potentially reducing the risk of uncontrolled supply additions and limiting price volatility over the medium to long term.

The analysts also pushed back on concerns over competition from China-based CXMT, which they estimate now accounts for the low-teens percentage of global wafer capacity. Bank of America wrote that CXMT primarily addresses the consumer and commodity DRAM segment rather than AI-focused products such as HBM3E and HBM4, limiting its competitive threat in AI memory.

GPU rental rates for Nvidia’s A100, H100 and H200 remained near all-time highs in July and August, the analysts noted, suggesting continued demand for AI computing. They wrote that the integrated HBM memory in GPUs is a key component in high demand, particularly for AI inference workloads.

Bank of America also noted that the four largest hyperscalers have acknowledged higher component costs in their second-quarter earnings reports, but none indicated that memory was constraining AI deployments. AWS was the only one to attribute an increase in its capital expenditure outlook to memory costs, according to the analysts.

Micron Technology Inc (NASDAQ:MU) remains a ‘Bu’y at Bank of America, which reiterated its $1,550 price target and viewed the recent pullback in the stock as an enhanced buying opportunity as end-demand, particularly from cloud and AI infrastructure, remains solidly on track.

Shares of Micron traded up 8% at about $895 on Tuesday afternoon, but remains down about 9% over the last month.

Bank of America analysts wrote that while memory prices and gross margins will eventually normalize as additional capacity arrives around mid-2027 through 2028, they believe the recent stock reset reflects investors positioning for an eventual downturn rather than a deterioration in current fundamentals.

The analysts highlighted several factors supporting their view, including the potential for Micron’s earnings to remain well above historical peaks even in a downturn, increasing use of long-term agreements, high GPU and HBM utilization and continued hyperscaler spending despite higher component costs.

Bank of America currently models calendar 2028 DRAM and NAND average selling prices declining 10% and 18% year over year, respectively, resulting in estimated EPS of about $150. Even under a bear-case scenario involving 30% and 40% declines in DRAM and NAND ASPs, respectively, the analysts believe Micron could generate roughly $100 in EPS.

That compares with a prior-cycle peak of about $12 in 2018, according to the analysts. A bull-case scenario with broadly flat ASPs in calendar 2028 would imply EPS of about $175, they wrote.

Bank of America also pointed to the growing use of long-term agreements as a factor that could improve supply and demand visibility, although the analysts acknowledged that LTAs may not prevent a downturn. Micron and Samsung have indicated that roughly 50% to 70% of capacity could eventually be covered by LTAs, potentially reducing the risk of uncontrolled supply additions and limiting price volatility over the medium to long term.

The analysts also pushed back on concerns over competition from China-based CXMT, which they estimate now accounts for the low-teens percentage of global wafer capacity. Bank of America wrote that CXMT primarily addresses the consumer and commodity DRAM segment rather than AI-focused products such as HBM3E and HBM4, limiting its competitive threat in AI memory.

GPU rental rates for Nvidia’s A100, H100 and H200 remained near all-time highs in July and August, the analysts noted, suggesting continued demand for AI computing. They wrote that the integrated HBM memory in GPUs is a key component in high demand, particularly for AI inference workloads.

Bank of America also noted that the four largest hyperscalers have acknowledged higher component costs in their second-quarter earnings reports, but none indicated that memory was constraining AI deployments. AWS was the only one to attribute an increase in its capital expenditure outlook to memory costs, according to the analysts.

Micron Technology shares MU surged more than 8% on Tuesday after Bank of America reaffirmed its bullish stance on the memory-chip maker, arguing that the recent weakness in semiconductor stocks presents an "enhanced buying opportunity" rather than a deterioration in the company's long-term outlook.

The rally also reflected improving sentiment across Wall Street, with the S&P 500 climbing about 1.5% to a fresh record after upbeat earnings from companies including Palantir Technologies and Caterpillar, while easing oil prices further boosted investor appetite for risk assets.

The brokerage maintained its Buy rating on Micron and reiterated a price target of $1,550, implying more than 72% upside from current trading levels.

AI demand remains the key driverIn a note to clients, Bank of America analyst Vivek Arya said investors have become overly focused on the possibility of future pricing pressure in the memory market, even though current fundamentals continue to improve.

Arya acknowledged that memory prices and profit margins are likely to normalize eventually as additional supply enters the market between mid-2027 and 2028.

However, he argued that the recent sell-off reflects investor positioning ahead of a potential downturn rather than any meaningful deterioration in demand.

"Hyperscaler spending continues to rise despite higher component costs, suggesting semis/memory pricing power," Arya wrote.

According to the brokerage, the ongoing wave of artificial intelligence investments by major cloud providers continues to support demand for advanced memory products, particularly high-bandwidth memory used in AI servers.

Bank of America also noted that GPU rental rates remain close to record highs, while none of the major hyperscale cloud companies has indicated that memory availability is limiting AI deployments.

That, Arya said, suggests pricing power across the semiconductor memory industry remains intact.

Earnings outlook remains resilientThe brokerage's bullish thesis is underpinned by its earnings expectations.

Bank of America projects Micron could generate earnings per share of roughly $150 in fiscal 2028.

Even under a bearish scenario in which DRAM and NAND prices decline in line with previous industry downturns, the brokerage believes earnings could still remain near $100 per share.

That would be substantially higher than Micron's previous cycle peak of around $12 per share recorded in 2018.

According to the brokerage, the stock is currently valued at only about eight to nine times its projected bear-case earnings, suggesting investors are assigning little value to the company's AI-related businesses, including its high-bandwidth memory segment.

Bank of America also pointed to the increasing use of long-term supply agreements, which it expects could eventually account for between 50% and 70% of industry capacity.

While such agreements cannot eliminate cyclical downturns, they could reduce pricing volatility compared with previous memory cycles.

Micron has faced significant volatility in recent weeks as investors questioned whether aggressive AI spending by hyperscale cloud companies would eventually slow and whether rising competition from China could erode the company's market position.

Concerns intensified after Chinese memory-chip maker ChangXin Memory Technologies, or CXMT, completed its initial public offering and reports emerged that the company was considering building a second DRAM fabrication facility in Beijing.

CXMT has rapidly expanded its presence in the global memory market.

According to Counterpoint Research, the company held an 8% share of the global DRAM market in the first quarter, compared with just 3% a year earlier.

BofA argued China's CXMT is still "not a threat in AI," as it primarily serves commodity DRAM rather than high-bandwidth memory.

Samsung Electronics, SK Hynix and Micron together still account for nearly 90% of the global DRAM market and continue to dominate the advanced high-bandwidth memory segment used in AI applications.

While investors remain wary of future industry supply increases, Bank of America believes the current pullback has created an attractive entry point for long-term investors betting on continued AI infrastructure spending and sustained demand for advanced memory chips.

Micron stock surged after Bank of America reaffirmed its Buy rating, citing strong AI demand, a resilient earnings outlook, and limited threat from China's CXMT.

For the second day in a row, Micron (MU +6.70%) stock has managed to maintain its momentum.

Shares of the memory stock inched about 1% higher on Monday after analysts at Morgan Stanley sounded the all-clear for artificial intelligence stocks, confirming revenues are growing fast enough to provide AI hyperscalers sufficient cash flow to buy the semiconductor chips they need. Today, Micron's getting an even more Micron-specific catalyst.

And Bank of America is behind it.

Image source: Micron.

Not just a buying opportunity -- an enhanced buying opportunity Writing on StreetInsider.com today, Bank of America's Micron analyst Vivek Arya reiterated his buy rating and $1,550 price target on the semiconductor memory stock. But here's the curious thing:

Arya argues that the Micron bears are actually right about the stock; they're just wrong about the timing. Semiconductors remain a cyclical industry. This means that at some point, supply will catch up with demand, prices will "normalize at some point," Micron's profit margins will decline, and the stock will come down.

But that point is not today -- and normal prices may be higher than you think.

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What this means for Micron Arya blames last week's sell-off in Micron stock on investors jumping the gun and selling the stock literally years before prices have "normalized," rather than reacting to "fundamentals" of the memory market today.

These fundamentals, says the analyst, will keep Micron's earnings elevated for at least a few more years, such that Micron can realistically earn $150 in 2028. Even pessimistically, he sees Micron earning no less than $100 that year, which would be "well above prior-cycle peak of ~$12 in 2018."

Even in the pessimistic view, therefore, Micron stock costs less than 9 times its earnings two years from now -- even cheaper than it costs today.

Bank of America is an advertising partner of Motley Fool Money. Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology. The Motley Fool has a disclosure policy.

The artificial intelligence (AI) sector is a great place to find investments right now. There are several great long-term opportunities available, and I think right now is the perfect time to pounce on them.

Three stocks that I think make for genius buys are Nvidia (NVDA +2.93%), Amazon (AMZN +4.58%), and Micron (MU +0.79%). All three come from different parts of the industry, and could deliver market-crushing returns during the next few years.

Image source: Getty Images.

1. Nvidia Nvidia is the king of AI investing, and for a good reason. Its graphics processing units (GPUs) and the products that support them are deployed in data centers around the world and are the primary choice for many AI businesses to use for training and inference. This top position has allowed Nvidia to post quarter after quarter of impressive results, and it doesn't look to be slowing down anytime soon. During Q1, it delivered 85% revenue growth, and in Q2, Wall Street expects nearly 100% growth.

To sweeten the deal, Nvidia's stock really isn't that expensive, trading for just 21.7 times forward earnings.

NVDA PE Ratio (Forward) data by YCharts

Deals like this don't last forever, and with AI hyperscalers continuing to ramp up spending, I think it bodes well for Nvidia's future.

2. Amazon Amazon usually isn't the first stock that comes to mind when discussing artificial intelligence, but I think it should be near the top. Amazon is a big spender on AI, and it is planning on $220 billion in data center capital expenditures this year. Amazon is seeing huge demand for its computing resources, which will, in turn, be used to train and run AI workloads.

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In Q2, Amazon Web Services' revenue skyrocketed 37%, easily outperforming the 31% growth Wall Street analysts expected from Amazon. This led to the stock spiking the following day, but I'm not concerned about a one-day pop.

Instead, I'm focused on the long term, and Amazon's huge data center capital expenditures will continue to boost AWS's growth rate for the foreseeable future. This will translate into soaring profit for Amazon. AI workloads will keep boosting cloud computing, and investing in Amazon now gives you the best chance to capitalize on that over the long term.

3. Micron Originally, Amazon was planning for $200 billion in data center capital expenditures this year. However, it had to bump that to $220 billion due to soaring memory chip prices. That's because demand for memory chips far outpaces supply, causing prices to skyrocket.

Micron is a memory chip fabricator and has been one of the biggest beneficiaries of surging memory prices. Its revenue and earnings have spiked in recent quarters, and there are no signs of this ending in the near future.

MU Revenue (Quarterly YoY Growth) data by YCharts

As a result, Micron remains one of the top growth stories in the market, as it could be a long time before memory chip prices come down. Micron's management team told investors that the company expects memory chip tightness to persist beyond 2027. Although that sounds like a concrete prediction, it's really just the company saying that in the near- to mid-term, there is no slowdown in sight due to major AI demand. That should translate into several years of strong growth for Micron, and makes it worth considering as an investment, as the growth it's putting up is second to none.

A wide variety of companies are benefiting from the AI boom. I think these three stocks give investors a great cross-section of the AI investing landscape, and I'm confident that this trio will easily outperform the broader market during the next few years.

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

The catalyst is Micron Technology (NASDAQ:MU | MU Price Prediction), whose stock has cooled sharply after a blistering multi-quarter run tied to AI memory demand. The memory maker closed at $829.50 on August 3, 2026, down 7.9% over the past week and 15.0% over the past month. This pullback follows a monster fiscal Q3 2026 earnings report on June 24, 2026, when Micron shares were priced at $1,064.99. Even after the drawdown, Micron is up 190.6% year to date and 690.9% over the trailing year. This is profit-taking inside a larger uptrend.

The Q3 report itself was blockbuster: revenue of $41.456 billion beat the consensus estimate by 17.6%, non-GAAP EPS came in at $25.11, and GAAP gross margin hit 84.6%. Q4 guidance called for revenue in a range of $49 billion to $51 billion. CEO Sanjay Mehrotra said Micron’s results reflect “the strategic value of memory in the AI era.” With expectations that lofty, the market is now digesting whether the HBM4 ramp and AI capex cycle can keep pace with the price the stock had already discounted. That digestion has bled unevenly into three of the most widely held tech ETFs, each with different exposure profiles to Micron.

VanEck Semiconductor ETF VanEck Semiconductor ETF (NASDAQ:SMH) is the fund taking Micron’s pullback most directly. Micron sits as the third-largest holding at 5.8% of net assets, ranked behind Nvidia at 17.8% and Taiwan Semi at 9.2%. It is a pure-play semiconductor basket with a 0.35% net expense ratio, and its top holdings all sit inside the same AI capex value chain, so weakness in one memory or logic name tends to correlate with the others rather than get diluted away.

Over the past month, SMH is down 7.9%, and down 0.6% over the past week. That trailing-month decline is close to the mirror image of Micron’s own drop, and given Micron’s significant weight, a meaningful slice of that move traces directly back to Micron. The rest sits inside correlated names: Nvidia, Taiwan Semiconductor, and AMD all move on the same AI-demand narrative that pushed Micron higher into the earnings print and has since let some air out. On longer horizons, SMH is up 50.1% year to date and 92.1% over the past year, so this is a cooldown inside a strong trend.

Invesco QQQ Trust Invesco QQQ Trust (NASDAQ:QQQ) tracks the Nasdaq 100 Index, the 100 largest non-financial companies on the Nasdaq. Micron is a Nasdaq-100 constituent, but its weight in QQQ is a fraction of what it is in SMH because the index also carries mega-cap software, consumer, and communications names that dwarf any single semiconductor holding.

That dilution shows up in the price action. QQQ is down just 1.8% over the past month, even as Micron fell 15%, and QQQ is actually up 2.6% over the past week. QQQ closed at $700.07 on August 3, 2026, up 14.0% year to date and 26.4% over the trailing year. In other words, Micron’s drawdown is a headwind on QQQ, but it is being offset by strength elsewhere in the mega-cap tech complex. QQQ is behaving like what it is: a diversified index vehicle where a single-name blowup or blowdown gets absorbed rather than amplified.

Vanguard Information Technology ETF Vanguard Information Technology ETF (NYSEARCA:VGT) carries a 0.09% net expense ratio and holds the U.S. information technology sector, with Micron included as a semiconductor constituent alongside much larger positions in software and hardware megacaps such as Apple, Microsoft, and Nvidia.

Over the past month, VGT is actually up 0.4%, and it has gained 2.4% over the past week. It closed at $115.14 on August 3, 2026, with a 22.2% year-to-date gain and a 36.6% one-year return. VGT’s tilt toward the largest software and platform names, which have rallied while semiconductor leaders consolidated, has more than absorbed Micron’s decline. Very little of VGT’s monthly move traces back to Micron; the fund’s positive return is being driven by its non-semiconductor sleeve.

The Takeaway Same underlying event, three very different payoffs. Micron’s post-earnings cooldown was amplified in the concentrated semiconductor basket (SMH), diluted in a broad Nasdaq index vehicle (QQQ), and effectively neutralized in a diversified tech-sector fund led by software megacaps (VGT). Concentration is the key variable: a significant weight in a correlated sub-sector basket transmits single-name volatility, while a smaller weight inside a diversified index dampens it. For investors sizing exposure to the AI memory trade, this episode is a clean case study in how the same headline hits different wrappers.

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© PeopleImages / E+ via Getty Images

Picture a retired couple in their late 60s living in Clay, just outside Syracuse. The mortgage was paid off years ago. Income comes from Social Security plus measured IRA withdrawals. Life was calm until Micron Technology (NASDAQ: MU | MU Price Prediction) poured the first concrete for its semiconductor complex nearby, the New York cornerstone of a plan exceeding $250 billion in U.S. investment through 2035. The project is expected to generate up to 50,000 jobs in New York, including 9,000 direct Micron positions. Suddenly, neighbors are talking about resale values, and the retirees are wondering what happens when the next assessment notice arrives.

Search any Central New York forum and you will find versions of the same question: My house may be worth more on paper, but I still live on a fixed check, so what do I do about the tax bill? A higher assessed value is not spendable income.

Two New York Programs Retirees Should Have on the Fridge New York offers a pair of property-tax breaks aimed squarely at older homeowners, and they can stack. Leaving either unchecked can mean forfeiting meaningful savings year after year.

Enhanced STAR. Available at age 65, with a 2026–2027 income ceiling of $110,750. For a Clay homeowner, maximum Enhanced STAR savings range from approximately $1,204 to $1,659, depending on the school district. The benefit applies to the school-tax portion of the bill. Senior Citizens Exemption. This separate program is administered locally by participating towns, counties, and school districts. It can reduce assessed value by as much as 50%, or as much as 65% where a locality has adopted New York’s expanded option for lower-income homeowners. Income limits and coverage vary by taxing authority, so the Clay assessor is the right first stop. The Detail That Trips Up Retirees With IRAs Here is the piece most retirees miss. The two programs count income differently. For Enhanced STAR, New York begins with federal adjusted gross income (AGI) and subtracts the taxable portion of IRA distributions. In plain English, a retiree who takes $30,000 from a traditional IRA may look like a higher earner on the federal return yet still land comfortably below the Enhanced STAR ceiling once the taxable distribution is backed out.

The Senior Citizens Exemption uses its own income rules, and the permitted adjustments can vary by taxing authority. A household can qualify for Enhanced STAR and still miss the local senior exemption. Treat them as two doors, not one.

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Where Social Security Fits The 2026 Social Security cost-of-living adjustment (COLA) is 2.8%, calculated from CPI-W, the inflation index the Social Security Administration (SSA) uses to set annual increases. That adjustment is national. It does not track one homeowner’s share of a local tax levy.

One reassuring point belongs in the math: Micron’s arrival does not automatically send every residential tax bill higher. New York sets tax levies separately from property assessments. If values rise across the community, the tax rate should fall proportionally. The couple’s bill becomes vulnerable if their home rises faster than surrounding properties or local governments and school districts increase the amount they collect. Those are the numbers to watch.

Calendar, Paperwork, and What to Confirm Locally A few practical notes are worth acting on:

Senior Citizens Exemption applications and renewals are due March 1 in Clay. Put the date on the calendar as a recurring annual task, the way you would a car inspection. Enhanced STAR upgrades became more automatic in 2026 for homeowners already receiving Basic STAR. The separate Senior Citizens Exemption can still require annual local paperwork. Do not assume one enrollment covers both. Ask the assessor how retirement withdrawals are counted by the town, county, and school district. The same household can qualify under one taxing authority’s rules and miss under another’s. When a semiconductor plant, data center, or battery factory lands near a paid-off home, walk through the assessor’s door before the next assessment cycle, not after. Rules, income limits, and savings amounts shift, so treat this as a prompt to verify the current numbers where you live, and to find out whether your own state offers a similar defense against a rising paper value.

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HomeIndustriesComputers/ElectronicsTech StocksTech StocksCXMT’s reported expansion plans initially spooked Micron investors, but the company’s shares then erased their intraday lossesAug. 3, 2026, 2:07 p.m. ET

ChangXin Memory Technologies, the world’s fourth-largest memory company, caught the attention of investors around the globe when it went public last month in Shanghai and saw its shares surge more than 400% above above their listing price.

Now Wall Street is focused on what comes next for CXMT CN:688825. It hasn’t exactly been a secret that the DRAM manufacturer wants to expand, but investors initially still seemed to be surprised by a report on Monday saying that the company is considering building a second memory-chip plant in Beijing.

Micron (MU +1.20%) stock, the leading memory chipmaker, skyrocketed through the first half of the year, up more than 300%, but since then, it's fallen apart.

The stock is down 29% from the start of July, even though there's been little news out on the company itself.

Micron's last earnings report was June 24, and the company blew past estimates on the top and bottom lines, with year-over-year revenue growth of more than 300%, and earnings per share up more than 10x.

It also issued much better guidance for the current quarter than expected. The stock peaked the day after the earnings report at $1,255 a share and has been falling since. Let's take a closer look at why the stock has been so volatile, and the key factor investors need to understand about Micron stock.

Image source: Getty Images.

Sentiment is in the driver's seat now The memory sector has historically been highly cyclical. In 2023, for example, Micron was reporting billions in annual losses due to an industry glut. The AI boom quickly turned that into a shortage, but after the stock surged more than 10x from its earlier levels, investors have been hedging against further gains, and investor sentiment around the stock has become exaggerated, amplifying every swing in the stock.

Because of the cyclicality of the memory sector, Wall Street analysts and others are continually refining their models in an attempt to predict when memory chip prices, and therefore profits, will peak. That means that every piece of news that could swing that calculus one way or another has an outsize impact on the stock.

For example, Micron stock tumbled last Wednesday after peer SK Hynix missed profit estimates despite strong growth. More broadly, concerns about hyperscalers overspending on capital expenditures have also pressured the stock and its AI infrastructure peers. Similarly, the stock fell when China's Kimi K3 model was launched last month, as investors worried it could disrupt market dynamics in the semiconductor industry.

What investors need to understand about the current price action around the stock is that it's being driven by fleeting news items, rather than the underlying performance of the business, which will ultimately drive the stock over the longer term. Therefore, investors are better off ignoring the day-to-day movements.

What it means for investors Predicting when the memory cycle peaks would be highly difficult at this point, as it's clear from comments last week from Apple and others that the sector is still tightening and prices are going up. SK Hynix CEO Kwak Noh-Jung even said that the memory chip shortage may last past 2030. Indeed, forecasts for Micron call for earnings to move significantly higher in fiscal 2027, which begins in September, climbing from an EPS forecast of $73.43 in fiscal 2026 to $155.56 next year, and EPS estimates have moved up modestly in the last month, a positive sign for Micron. For fiscal 2028, the consensus is now $181.37, though these numbers are likely to change a lot in the coming quarters.

In addition to the difficulty of predicting the path of the memory cycle, some investors are now arguing that the traditional cyclicality of memory chips has been broken by AI, as any future bottom of a cycle will be much higher, and the proliferation of physical AI devices like autonomous vehicles will continue to expand the market for memory chips. For example, a Waymo robotaxi uses 25 to 40 times more RAM than a typical iPhone.

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Is Micron a buy? Investors should be prepared for continued pressure and volatility in the stock, but the valuation math continues to look attractive. Taking the fiscal 2028 earnings number above, Micron trades at less than five times 2028 earnings now, and analysts have underestimated the company's growth in recent quarters, so we could see those estimates move even higher.

Keep an eye on the forward EPS consensus for the stock, as it should be a better indicator of the stock's performance over the coming years than day-to-day movements, which are driven by sentiment.

It will continue to be a wild ride for Micron, but at the current price, the stock looks like a good bet to rise over the next year or two.

HomeStock IdeasLong IdeasTech 

SummaryMicron Technology, Inc. has surged ~80% since my initial strong Buy rating, vastly outperforming the broader market.MU’s rally was initially suppressed by macro headwinds, with a significant rerating occurring after Q2 earnings as market risks abated.Following Q3 earnings, MU’s price action suggests a rerating has not materialized.The Q3 selloff appears driven by an exogenous factor repricing across the memory complex rather than any deterioration in Micron's own results, which came in well ahead of guidance.With guidance pointing to further growth, MU valuation still undemanding, and technical positioning improved, I see a path back to the post-earnings high, implying at least 52% near-term upside. vzphotos/iStock Editorial via Getty Images

A couple of months ago, I initiated coverage on Micron Technology, Inc. (MU), assigning a Strong Buy rating on the stock given the potential for further growth. Indeed, since then, MU has soared by ~80% and the

1.41K Followers

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Although Micron Technology, Inc. (Nasdaq: MU) stock dropped by more than 16% over the past 30 days, Atif Malik, a Wall Street analyst at Citigroup Inc. (NYSE: C), expects the company’s shares to rally and hit a new all-time high (ATH) in the next 12 months.

Malik maintained a ‘Buy’ rating for Micron stock, according to a note to clients on August 3, 2026. He also reiterated a 12-month price target of $1,400, thereby signaling a potential 70.52% upside.

The analyst expects a strong recovery in memory demand, hence bolstering a bullish outlook for MU shares for the next 12 months. Furthermore, he believes that strong demand for memory products amid the AI boom should translate into robust earnings growth compared to the current consensus expectations.

Malik highlighted that Micron is well-positioned to attract investments through AI-related data centers and adoption in high-bandwidth memory products. As such, he concluded that the long-term outlook for MU stock price has an attractive risk-to-reward ratio.

Micron stock price forecast 2026 Similar to Malik, Vivek Arya, an analyst at Bank of America Corp. (NYSE: BAC), reaffirmed a Buy rating of Micron stock on Monday. As a result, 30 Wall Street analysts surveyed by TipRanks have set an average 12-month price target of $1,570, which represents a possible 91.05% upside.

Notably, 29 of the 30 experts have issued a Buy rating for MU, thereby signaling strong bullish conviction in 2026 and through the first half of 2027.

Over the past 30 days, MU shares dropped by 16.71%, trading at $820.17 at the time of publication. The company had a market capitalization of approximately $929.5 billion, following a 5.9% uptick during the last 24 hours.

MU share price chart for 30 days. Source: Finbold  Consequently, Wall Street analysts, led by Malik, are signaling a major bull rally for MU stock over the next 12 months, despite the recent correction.

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Artificial intelligence has done more than ignite a spending boom. It has reshaped who holds the pricing power across the technology industry. For years, the biggest profits flowed to software platforms and internet giants with low operating costs and recurring revenue. Today, the companies building AI infrastructure are discovering that some of the biggest winners are the suppliers making the critical components no one can do without. 

That shift has turned memory maker Micron Technology (NASDAQ:MU | MU Price Prediction) into one of the AI era’s biggest beneficiaries, but it also raises an important question for investors: just how long can these extraordinary profits last?

AI Has Turned Memory Into A Strategic Asset Meta Platforms (NASDAQ:META), Alphabet (NASDAQ:GOOG), and Microsoft (NASDAQ:MSFT) continue pouring hundreds of billions of dollars into AI infrastructure because the payoff could redefine their businesses for years to come. Those investments have also handed suppliers unprecedented leverage.

Here’s what the latest earnings reports show:

Company Gross Margin Primary Profit Engine Meta Platforms ~81% Digital advertising Microsoft ~67% Productivity & Business Processes and Intelligent Cloud Alphabet ~61% Search and advertising Micron ~85% DRAM, NAND, and HBM memory That last figure stands out. Micron is fundamentally a hardware manufacturer, a business that historically carried far lower margins because fabrication plants cost billions of dollars to build and operate. Three years ago, the company was posting negative gross margins as excess supply crushed pricing. Today, fiscal third-quarter gross margin reached 84.9%, more than doubling from a year earlier thanks to soaring prices for AI memory.

To put that into context, Meta and Alphabet generate enormous profits from advertising, while Microsoft’s software ecosystem enjoys naturally high margins because each additional customer costs relatively little to serve. Micron, by contrast, manufactures physical chips — and yet it is temporarily earning more on every dollar of sales than all three.

Software giants are losing their edge as one hardware supplier seizes the highest margins in tech history. © 24/7 Wall St. Supply Constraints Have Shifted Pricing Power The reason is simple: memory has become one of AI’s biggest bottlenecks. Only three companies — Micron, Samsung Electronics, and SK Hynix (NASDAQ:SKHY) — produce the advanced memory needed for AI servers at scale, controlling about 90% of the market. With hyperscalers racing to build data centers, supply has struggled to keep pace.

Industry pricing reflects that imbalance. High-performance memory prices have roughly doubled over the past year, while some segments have risen even more as AI demand absorbed available supply.

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Ironically, Apple (NASDAQ:AAPL) has become one of the loudest critics of today’s pricing environment. CEO Tim Cook recently described memory inflation as a “hundred-year flood” and accused Micron of “gouging,” arguing that the industry needs more suppliers after rising DRAM costs pressured Apple’s margins.

Micron executives have countered that perspective by noting the memory industry spent years enduring razor-thin — or even negative — margins after aggressive customer negotiations discouraged investment in new capacity. In other words, today’s shortage is partly the result of yesterday’s pricing pressure.

The Margin Story Isn’t Over — But It Won’t Last Forever Granted, memory has always been cyclical. Micron shares have already fallen roughly 36% from their June peak as investors worry that Micron, SK Hynix, and Samsung are all investing heavily to expand production. Eventually, those new fabs should bring supply and demand back toward equilibrium.

That said, semiconductor manufacturing doesn’t change overnight. Building advanced memory capacity takes years, not quarters. Several industry forecasts continue pointing to tight HBM supply through 2027, with some analysts expecting pricing strength to extend into 2028 before meaningful relief arrives.

Key Takeaway In short, Micron’s industry-leading margins are unlikely to represent a permanent new normal. Memory has always been cyclical, and eventually today’s supply shortages will ease.

Regardless, that turning point does not appear imminent. AI infrastructure spending continues accelerating, capacity additions remain years from full production, and the industry’s limited number of suppliers still holds the negotiating leverage. 

For investors, that means Micron’s margin advantage could persist well into next year — and perhaps beyond — even if the clock is already ticking on this remarkable chapter in memory’s long history.

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It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.

The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor.

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What are the Zacks Style Scores? Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days.

Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.

The Style Scores are broken down into four categories:

Value ScoreFinding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.

Growth ScoreWhile good value is important, growth investors are more focused on a company's financial strength and health, and its future outlook. The Growth Style Score takes projected and historic earnings, sales, and cash flow into account to uncover stocks that will see long-term, sustainable growth.

Momentum ScoreMomentum investors, who live by the saying "the trend is your friend," are most interested in taking advantage of upward or downward trends in a stock's price or earnings outlook. Utilizing one-week price change and the monthly percentage change in earnings estimates, among other factors, the Momentum Style Score can help determine favorable times to buy high-momentum stocks.

VGM ScoreWhat if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.

How Style Scores Work with the Zacks Rank A proprietary stock-rating model, the Zacks Rank utilizes the power of earnings estimate revisions, or changes to a company's earnings outlook, to help investors create a successful portfolio.

#1 (Strong Buy) stocks have produced an unmatched +23.94% average annual return since 1988, which is more than double the S&P 500's performance over the same time frame. However, the Zacks Rank examines a ton of stocks, and there can be more than 200 companies with a Strong Buy rank, and another 600 with a #2 (Buy) rank, on any given day.

With more than 800 top-rated stocks to choose from, it can certainly feel overwhelming to pick the ones that are right for you and your investing journey.

That's where the Style Scores come in.

To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.

Since the Scores were created to work together with the Zacks Rank, the direction of a stock's earnings estimate revisions should be a key factor when choosing which stocks to buy.

For instance, a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one that boasts Scores of A and B, still has a downward-trending earnings forecast, and a much greater likelihood its share price will decline as well.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: Micron (MU - Free Report) Micron Technology, Inc., headquartered in Idaho, has established itself as one of the leading worldwide providers of semiconductor memory solutions.

MU is a #1 (Strong Buy) on the Zacks Rank, with a VGM Score of B.

Additionally, the company could be a top pick for growth investors. MU has a Growth Style Score of A, forecasting year-over-year earnings growth of 791% for the current fiscal year.

13 analysts revised their earnings estimate upwards in the last 60 days for fiscal 2026. The Zacks Consensus Estimate has increased $14.20 to $73.86 per share. MU boasts an average earnings surprise of +21.1%.

With a solid Zacks Rank and top-tier Growth and VGM Style Scores, MU should be on investors' short list.

Micron stock was down on Monday following a report on the production plans of China's CXMT.

Micron, SanDisk and SK Hynix shares have suffered a reversal of the artificial-intelligence boom, but Morgan Stanley believes forced selling behind South Korea’s market crash may be losing momentum.

The bank upgraded Korean equities to Overweight from Equal-weight on Monday, arguing that a “leverage washout” had created a better entry point into AI and industrial stocks.

Its 9,000 Kospi target implies 36% upside from Friday’s close.

The recommendation applies to South Korea, not directly to US-listed Micron or SanDisk.

Even so, it argues that if leverage caused more damage than weakening demand, July’s collapse may have reset valuations without ending the cycle.

Strategists led by Daniel K Blake described the Korean sell-off as “mainly technical”, Bloomberg reported.

They said the market had moved beyond the midpoint of unwinding leveraged exchange-traded funds, hedge-fund exposure and retail margin debt.

SanDisk lost 47% in July, Micron fell 29% and the Roundhill Memory ETF dropped about 32%.

SK Hynix and Samsung Electronics suffered steep declines as leveraged products magnified profit-taking.

Peter Kim, managing director at KB Securities, offered a similar diagnosis.

He told Reuters that the rout was “not driven by fundamental deterioration”, but by liquidity, fragile sentiment and forced unwinding across Korea and overseas markets.

Kim warned that accumulated leverage meant the clean-out would not finish within one or two weeks.

Morgan Stanley’s upgrade signals improving risk and reward, rather than an assurance that volatility has ended.

SK Hynix is the clearest beneficiary as it is a Kospi constituent and a supplier of high-bandwidth memory used in AI accelerators.

Morgan Stanley expects SK Hynix and Samsung to provide valuation support as investors revisit AI and industrial themes.

The read-through to Micron and SanDisk is indirect but meaningful. Micron competes in DRAM and HBM, while SanDisk supplies NAND flash storage.

Their products differ, yet all three depend on data-centre investment, memory pricing and confidence that AI demand can absorb capacity.

Forrester analyst Alvin Nguyen called the memory-stock sell-off an “overreaction” in comments to The Guardian.

He argued that manufacturers including SK Hynix and Micron cannot produce enough memory to meet demand, with the shortage potentially lasting until 2030.

Apple and Amazon reinforced that message last week. Their results highlighted rising memory costs and infrastructure spending.

Micron closed 5.9% lower on Friday and SanDisk lost about 5%, showing strong demand evidence has not displaced profit-taking or peak-cycle fears.

Morgan Stanley has not declared a bottom in every memory stock. The Kospi fell 4.5% early Monday after Friday’s record 17.9% rebound, while SK Hynix dropped 7.8% and Samsung lost 8%.

Expectations remain demanding. SK Hynix reported record quarterly results last week, yet its shares fell after earnings missed forecasts.

Investors want evidence of durable contracts, shareholder returns and pricing power, not simply rapid profit growth.

China presents the challenge. CXMT is expanding conventional DRAM production, while established manufacturers are investing in capacity.

Those additions may eventually ease shortages and squeeze margins, even if Chinese competition remains less advanced in premium HBM.

Micron Technology (MU -5.90%) is one of the world's top suppliers of high-bandwidth memory (HBM) for data centers, which helps maximize processing speeds in artificial intelligence (AI) workloads. Demand for this hardware is off the charts, resulting in a severe shortage that is giving Micron the ability to dictate prices.

But despite these favorable conditions, Micron stock recently plummeted by 32% from its June record high. Concerns are growing about the sustainability of the AI infrastructure spending boom, as the soaring cost of chips and components threatens the financial viability of deploying AI software.

To keep things in perspective, Micron stock is still sitting on a one-year gain of almost 700%, so the sky isn't exactly falling just yet. But here's why I won't be buying the recent dip.

Image source: The Motley Fool.

Why Micron stock is sinking According to a forecast by Bloomberg, there will be around 118 gigawatts' worth of data center capacity installed across the U.S. by 2030 to support the AI boom. Nvidia CEO Jensen Huang says building a single gigawatt worth of capacity requires $50 billion worth of capital investment, so if Bloomberg's forecast proves to be accurate, America's tech giants will have spent a staggering $5.9 trillion by 2030.

Those companies have to generate a return on all of that capital spending, otherwise it wouldn't make economic sense. Some of them will achieve this by renting computing capacity to other businesses for a fee, while others will charge for the use of their AI models and software applications. But as hardware prices continue to soar, AI companies have to charge their customers more money, and it's quickly becoming unsustainable.

Microsoft and Anthropic recently implemented price increases for some of their AI software products, with concerning results. For example, Uber Technologies burned through its entire 2026 AI budget in just four months by using Anthropic's Claude Code, and the company's chief operating officer said it's becoming hard to justify the current rate of spending.

Amazon and Walmart recently joined Uber in capping AI usage for their employees to prevent further budget blowouts. But they aren't alone, because a survey by UBS Group found that 60% of businesses are now routing tasks to cheaper, more efficient AI models to help reduce costs.

Any reduction in AI software spending will mean less demand for computing capacity, and the knock-on effects will eventually hit chipmakers like Micron in the form of weaker sales. The recent decline in Micron stock is Wall Street's way of pricing in this potential risk.

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Micron's revenue continues to soar The recent AI jitters haven't shown up in Micron's financial results. The company delivered a record $41.4 billion in total revenue during its fiscal 2026 third quarter (ended May 28), a whopping 346% increase from the year-ago period. AI-related memory demand for data centers, computers, smartphones, and even cars fueled significant sales growth across all four segments of the business.

Micron also generated earnings of $24.67 per share during the quarter, a remarkable 1,368% increase from the year-ago period. As I mentioned earlier, the global memory shortage is giving the company incredible pricing power, and this is boosting its profit margins.

Micron's guidance for the current quarter (which concludes at the end of August) points to further strength, with $50 billion in revenue and earnings of $30.73 per share potentially on the table. However, there is still time for a demand slowdown to impact the official results.

Micron stock is cheap, but I'm not a buyer Based on Micron's trailing 12-month earnings of $44.23 per share and its closing stock price of $823 last on Friday, July 31, it's trading at a price-to-earnings (P/E) ratio of just 18.6. That is a substantial discount to the Nasdaq-100 index which has a P/E ratio of 32.6, suggesting Micron is undervalued compared to its big-tech peers.

Moreover, Wall Street expects Micron to grow its earnings to $153.74 in fiscal 2027, placing its stock at a forward P/E ratio of just 5.3. By all accounts, this stock looks like an absolute bargain right now.

But if demand for AI hardware does soften, then Wall Street's earnings forecast might be too ambitious. There is also risk on the supply side, because Micron and all of its competitors are frantically building more manufacturing capacity to meet demand, so they will eventually give up some of their pricing power. At that point, it will be difficult for Micron to maintain its current level of earnings, so its stock might actually be more expensive today than its forward P/E ratio implies.

It's hard to nail down a fair price for Micron stock in the face of all this uncertainty, so I won't be taking advantage of the recent dip.

In its fiscal third quarter (ended May 28, 2026), memory specialist Micron Technology (MU -5.90%) booked $41.5 billion of revenue -- more than it generated in any full fiscal year in its history. Its best year ever, fiscal 2025, brought in $37.4 billion.

The market spent Thursday deciding the story has further to run. Shares jumped 18.4% to $874.66 after Samsung told investors it expects the memory shortage to worsen in 2027 and continue into 2028. Micron's market value stood near $988 billion at Thursday's close, and the stock would need a climb of more than 40% to revisit its high of $1,255.

So, where could the stock realistically be in 2030? I think the honest answer has to take memory's history as seriously as its moment.

Image source: Micron.

What the boom is delivering The scale here is worth spelling out. Revenue of $41.5 billion was up nearly 350% year over year, from $9.3 billion, and up from $23.9 billion just one quarter earlier.

Profits are keeping pace. GAAP net income came in at $28.2 billion, helped by a gross margin of 84.6%. Operating cash flow was $25.4 billion, up from $11.9 billion the prior quarter and $4.6 billion in the year-ago period.

And even after $7.1 billion of capital expenditures, Micron generated $18.3 billion of adjusted free cash flow in a single quarter.

Even more, management expects a bigger quarter ahead. Guidance for the fiscal fourth quarter calls for roughly $50 billion of revenue, give or take a billion, at a gross margin near 86% -- with earnings of about $30.73 per share. Annualize that guided pace, and Micron is running at about $123 of earnings per share. At Thursday's close, the stock trades at about 7 times its guided earnings power. Measured against the past 12 months instead, shares go for about 20 times earnings. The distance between those two numbers is the market saying it doesn't trust the boom to hold.

The company also argues that this cycle is built differently.

"We believe our multi-year Strategic Customer Agreements will significantly enhance the durability and predictability of Micron's strong financial performance," said CEO Sanjay Mehrotra in the fiscal third-quarter earnings release.

Locked-in customer commitments, plus HBM4 (Micron's latest high-bandwidth memory for artificial intelligence (AI) accelerators) already shipping in high volume and its successor, HBM4E, pointed at 2027, form the case for this boom outlasting past ones.

What the cycle says about 2030 Zoom out, however, and memory's history argues for caution. In fiscal 2023, an oversupplied market roughly halved Micron's revenue to $15.5 billion, and the company lost $5.8 billion. That was three years ago -- same company, same industry. After all, booms in this business have always financed the supply that eventually ends them, and prices like today's are an open invitation for rivals to add capacity.

So build the range from both truths.

If contracted pricing holds and AI demand keeps absorbing supply into the decade, earnings power in the $120-per-share range could persist or even grow. Give that a multiple of 10 to 12 (arguably modest for a business this profitable), and the stock sits somewhere around $1,200 to $1,500 by 2030.

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If the cycle turns the way it always has historically, however, the math changes completely. Suppose earnings settle toward a mid-cycle level -- call it $40 to $60 per share, somewhere between fiscal 2025's $7.59 and today's triple digits. At 10 to 12 times, that's a stock somewhere between $400 and $700.

Split the difference, and the expected range is about $800 to $1,100, close to where the stock already trades. The midpoint of this range implies only modest returns from Thursday's $874.66. The market, it seems, has priced the middle path: several more boom quarters, then a slide toward normal.

That framing shapes what I'd do. I'd consider owning Micron here, but only modestly. The contracts and the product lineup make this boom sturdier than the last one, and 7 times guided earnings is not a price that requires perfection.

But memory has never gone in one direction for long, and I don't expect 2030 to arrive without another turn of the cycle. My base case is that the stock lands in the $800 to $1,100 range by then, with plenty of room to be wrong in either direction. If the fiscal fourth-quarter report (likely this fall) shows the supply agreements holding prices the way management promises, the higher end gets more believable.

Axiom Investment Management LLC acquired a new position in shares of Micron Technology, Inc. (NASDAQ:MU – Free Report) in the first quarter, according to its most recent filing with the Securities & Exchange Commission. The firm acquired 7,064 shares of the semiconductor manufacturer’s stock, valued at approximately $2,387,000. Micron Technology makes up approximately 1.8% of Axiom Investment Management LLC’s holdings, making the stock its 13th biggest position.

Other hedge funds and other institutional investors have also bought and sold shares of the company. Brighton Jones LLC grew its holdings in shares of Micron Technology by 18.3% in the 4th quarter. Brighton Jones LLC now owns 6,318 shares of the semiconductor manufacturer’s stock valued at $532,000 after acquiring an additional 976 shares in the last quarter. Sivia Capital Partners LLC raised its holdings in Micron Technology by 21.7% during the second quarter. Sivia Capital Partners LLC now owns 3,528 shares of the semiconductor manufacturer’s stock worth $435,000 after acquiring an additional 628 shares in the last quarter. United Bank bought a new stake in Micron Technology during the second quarter worth about $236,000. Schnieders Capital Management LLC. boosted its position in Micron Technology by 67.9% during the second quarter. Schnieders Capital Management LLC. now owns 16,984 shares of the semiconductor manufacturer’s stock valued at $2,093,000 after purchasing an additional 6,867 shares during the last quarter. Finally, Sei Investments Co. increased its position in shares of Micron Technology by 5.6% during the 2nd quarter. Sei Investments Co. now owns 405,545 shares of the semiconductor manufacturer’s stock worth $49,987,000 after purchasing an additional 21,619 shares during the last quarter. Institutional investors and hedge funds own 80.84% of the company’s stock.

Micron Technology Trading Down 5.9% MU stock opened at $823.03 on Friday. The company has a debt-to-equity ratio of 0.05, a current ratio of 3.42 and a quick ratio of 2.98. The company has a fifty day moving average price of $976.92 and a two-hundred day moving average price of $639.97. Micron Technology, Inc. has a one year low of $103.38 and a one year high of $1,255.00. The stock has a market cap of $929.52 billion, a price-to-earnings ratio of 18.63 and a beta of 2.14.

Micron Technology (NASDAQ:MU – Get Free Report) last issued its quarterly earnings data on Wednesday, June 24th. The semiconductor manufacturer reported $25.11 earnings per share for the quarter, beating the consensus estimate of $21.39 by $3.72. The company had revenue of $41.46 billion for the quarter, compared to analyst estimates of $35.91 billion. Micron Technology had a net margin of 55.91% and a return on equity of 71.13%. The company’s revenue was up 345.8% on a year-over-year basis. During the same period in the prior year, the firm earned $1.91 earnings per share. Micron Technology has set its Q4 2026 guidance at 30.000-32.000 EPS. Equities analysts anticipate that Micron Technology, Inc. will post 72.93 EPS for the current year.

Micron Technology Dividend Announcement The company also recently announced a quarterly dividend, which was paid on Tuesday, July 21st. Stockholders of record on Monday, July 6th were paid a dividend of $0.15 per share. The ex-dividend date was Monday, July 6th. This represents a $0.60 dividend on an annualized basis and a dividend yield of 0.1%. Micron Technology’s dividend payout ratio (DPR) is 1.36%.

Micron Technology News Summary Here are the key news stories impacting Micron Technology this week:

Positive Sentiment: Memory shortage outlook remains supportive: Apple CEO Tim Cook said memory costs rose significantly in the latest quarter and are likely to remain elevated, while Samsung indicated supply constraints could persist through 2028. These comments reinforce expectations for strong pricing and demand for Micron’s DRAM and high-bandwidth memory products. Why Micron Stock Is Rising on What Apple’s Tim Cook Didn’t Say Positive Sentiment: Sector fund flows and AI spending provide support: Semiconductor ETFs attracted substantial new money this week as investors responded to strong technology earnings. Separate analyst commentary continues to point to more than $750 billion in planned 2026 Big Tech AI spending, supporting long-term demand for Micron’s AI memory products. Semiconductor ETFs Draw Cash This Week as Chip Stocks Rally Positive Sentiment: Fundamentals and valuation remain bullish arguments: Micron recently reported much better-than-expected quarterly earnings and revenue, with revenue up more than 345% year over year. Analysts cited strong free cash flow, strategic customer agreements and AI-driven demand, with reported price targets substantially above the current trading level. Neutral Sentiment: Technical trading is highly volatile: MU rebounded from a key support area and generated a bullish trading signal, but significant overhead resistance remains. Large intraday swings and elevated options activity are making short-term direction difficult to predict. Micron stock rebounds off key support, but technical overhead persists Negative Sentiment: Near-term selling pressure weighs on the shares: Reports attributed the latest weakness to semiconductor-sector profit-taking, leveraged-fund liquidations and updated short positions. A prominent bearish investor, Michael Burry, also disclosed expanded bets against Micron and other chip stocks, adding to negative sentiment. Why Is Micron Stock Falling on Friday? Negative Sentiment: Insider selling is another overhang: Recent disclosures show extensive sales by Micron executives, including CEO Sanjay Mehrotra, with no reported insider purchases in the cited six-month period. While these transactions may be scheduled, investors may interpret them as a short-term confidence signal. Insider Activity at Micron Technology In related news, CEO Sanjay Mehrotra sold 31,285 shares of Micron Technology stock in a transaction that occurred on Friday, July 24th. The shares were sold at an average price of $926.83, for a total transaction of $28,995,876.55. Following the sale, the chief executive officer directly owned 313,218 shares of the company’s stock, valued at approximately $290,299,838.94. The trade was a 9.08% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, Director Steven J. Gomo sold 2,000 shares of the company’s stock in a transaction dated Monday, May 11th. The stock was sold at an average price of $787.03, for a total value of $1,574,060.00. Following the completion of the transaction, the director directly owned 17,139 shares of the company’s stock, valued at approximately $13,488,907.17. The trade was a 10.45% decrease in their position. The disclosure for this sale is available in the SEC filing. In the last ninety days, insiders have sold 164,179 shares of company stock valued at $169,385,921. 0.24% of the stock is currently owned by insiders.

Analyst Ratings Changes Several equities analysts recently weighed in on the stock. Stifel Nicolaus raised their target price on shares of Micron Technology from $550.00 to $1,500.00 and gave the company a “buy” rating in a research note on Thursday, June 18th. Erste Group Bank upgraded shares of Micron Technology from a “hold” rating to a “buy” rating in a report on Thursday, June 25th. Wells Fargo & Company boosted their price objective on shares of Micron Technology from $1,220.00 to $1,525.00 and gave the stock an “overweight” rating in a research note on Thursday, June 25th. Wolfe Research set a $1,500.00 target price on shares of Micron Technology in a report on Thursday, June 25th. Finally, TD Cowen reiterated a “buy” rating on shares of Micron Technology in a research note on Friday, July 10th. Four research analysts have rated the stock with a Strong Buy rating, thirty have given a Buy rating and three have given a Hold rating to the company. Based on data from MarketBeat.com, the company has an average rating of “Buy” and an average target price of $1,268.93.

Check Out Our Latest Research Report on Micron Technology

Micron Technology Company Profile (Free Report)

Micron Technology, Inc is a global semiconductor company that designs and manufactures memory and storage solutions. Its product portfolio includes dynamic random-access memory (DRAM), NAND flash memory, solid-state drives (SSDs), memory modules and embedded memory solutions for a wide range of computing and electronic devices. Micron supplies components used in data centers, enterprise and cloud infrastructure, client computing, mobile devices, automotive systems and industrial applications, and also markets consumer-facing products under the Crucial brand.

Founded in 1978 and headquartered in Boise, Idaho, Micron has grown into an international manufacturer with research, development and production facilities across multiple regions.

See Also Five stocks we like better than Micron Technology Chevron’s Strong Quarter Shows Why It Still Leads the Energy Sector Amazon’s Earnings Beat Shows Why AWS Is Back at the Center of the Bull Case Apple’s Record Quarter Could Not Outrun Its Guidance Problem McKesson’s Compounding Keeps Adding Up Want to see what other hedge funds are holding MU? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Micron Technology, Inc. (NASDAQ:MU – Free Report).

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Do you view the proverbial glass of water as half-full or half-empty? How you answer the question could dictate how you view Micron Technology (MU -5.90%) right now.

If you're a half-full kind of person, you'll probably focus on the fact that Micron's stock has skyrocketed so far in 2026. You could also point out that Micron has delivered the third-highest year-to-date gain among S&P 500 (^GSPC +0.70%) members.

On the other hand, if you see the glass of water as half-empty, you'll likely emphasize that Micron's shares have plunged since peaking in late June. And you would almost certainly underscore some of the risks the company faces going forward.

Where will Micron's stock trade at the end of 2026? Here's my prediction.

Image source: Micron Technology.

The bull case for Micron To say that Micron's business is booming would arguably be an understatement. The company's revenue soared roughly 3.5x year over year and 74% quarter over quarter in its fiscal 2026 third quarter to $41.5 billion. Earnings jumped nearly 15x year over year and more than doubled from the previous quarter.

This tremendous momentum is due to supply and demand. The supply of memory chips, especially high-bandwidth memory (HBM), is limited to only two other major manufacturers other than Micron. Meanwhile, demand for memory is surging amid the ongoing explosive adoption of artificial intelligence (AI).

Wall Street remains overwhelmingly bullish about Micron even after the stock's impressive gains this year. Of the 45 analysts surveyed by S&P Global (SPGI -0.74%) in July, 40 rated the stock as a "buy" or "strong buy." The other five outliers recommended holding Micron. The consensus 12-month price target reflects upside potential of over 80%.

There's also a wild card for Micron that could accelerate its momentum in the not-too-distant future. CEO Sanjay Mehrotra said during the company's Q3 earnings call, "Humanoid robots carry 10 times the amount of memory as an average L2+ [semi-autonomous] vehicle, and we expect a sustained, substantial multi-decade memory demand cycle to begin in the latter part of this decade."

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Threats from China -- and history What's not to like about Micron? For one thing, a potential threat could be rising in China.

ChangXin Memory Technologies (SHA: 688825) recently conducted its initial public offering (IPO) on the Shanghai Stock Exchange. The semiconductor company currently generates nearly all of its revenue from DRAM chips. However, should CXMT's investments in HBM enable it to catch up with Micron and others, it could become a formidable competitor.

Micron's shares still trade at only 5.8 times forward earnings. That's a dirt cheap multiple for a tech stock. But there's a reason behind this low valuation: Many investors know that Micron has historically been a cyclical stock. And cyclical stocks often don't command premium price tags even when their businesses are growing strongly.

Sooner or later, the supply of memory will exceed demand. When that happens, prices will inevitably fall. So will Micron's share price.

What about my promised prediction of where Micron's share price will be at year-end? I expect the stock will trade somewhere between $1,050 and $1,150. The midpoint of this range reflects upside of over 30%.

I'm bullish about Micron primarily because I don't think the supply demand imbalance for memory chips will be resolved anytime soon. Mehrotra stated in the Q3 earnings call that management expects "tight conditions to persist beyond calendar 2027 as a result of AI-driven demand across all segments coupled with structural supply constraints." I think he's right.

I also agree with Morningstar's (MORN -0.28%) assessment that CXMT faces a "a significant technological barrier" due to its lack of access to advanced extreme ultraviolet (EUV) lithography. Morningstar concluded in a recent report that this hurdle "is likely to prevent the company from materially closing the technological gap versus global memory leaders."

Granted, a disappointing Q4 update from Micron could cause my prediction to fall short. However, with the prevailing market dynamics, I don't expect that to happen.

Semiconductor stocks are crashing, and investors are comparing buying opportunities.

*Stock prices used were the afternoon prices of July 29, 2026. The video was published on July 31, 2026.

Parkev Tatevosian, CFA has positions in Nvidia. The Motley Fool has positions in and recommends Micron Technology and Nvidia. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.