CES, held annually in January, is one of the most important trade shows where tech companies go to unveil innovations and showcase bold ideas for the future.
At the 2026 event, Nvidia CEO Jensen Huang offered something that has been just as impactful: his insights about the growing memory needs of artificial intelligence (AI). And based on where the stock prices of Micron Technology (MU +0.04%) and Sandisk (SNDK 3.99%) have gone since then, his understand of the situation was right on the money.
Nvidia CEO Jensen Huang. Image source: Nvidia.
The AI memory crunch Large language models are being asked to deliver on requests promptly, but there's also a growing expectation that these tools will preserve users' older requests and conversations as time savers to provide context for the new ones. That requires increasingly higher memory capacity in the data centers that power those AIs, which Huang alluded to in his January CES speech:
We would like this AI to stay with us our entire lives and remember every single conversation we've ever had with it, right? Every single lick of research that I've asked for. Of course, the number of people sharing the supercomputer will continue to grow. And so, this context memory, which started out fitting inside an HBM, is no longer large enough.
Over the last year, as Micron and Sandisk have kept reporting surging revenue figures in their respective quarterly reports, Huang's insight on the expanding demand for memory and storage for AI has proven true.
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AI boosts revenue In Micron's fiscal 2026 third quarter, it reported total revenue of $41.4 billion, which was a significant increase for the company; its full-year revenue in 2025 was just $37.3 billion. That rapid revenue growth is thanks to its cloud and data center divisions.
Quarter
Cloud Memory Revenue
Core Data Center Revenue
Q3 2025
$3.3 billion
$1.5 billion
Q3 2026
$13.7 billion
$11.5 billion
Data source: Micron.
Sandisk's top line is smaller than Micron's, but it's still growing significantly. Its total revenue in its fiscal 2026 third quarter was $5.9 billion, up 251%. Its data center and edge divisions (providing memory storage for things like drones and car sensors) have been key revenue drivers.
Quarter
Data Center Revenue
Edge Revenue
Q3 2025
$197 million
$927 million
Q3 2026
$1.4 billion
$3.6 billion
Data source: Sandisk.
Why sales can keep growing The AI infrastructure build-out isn't expected to slow down anytime soon, and as long as it continues, demand for memory and storage chips will remain robust. But each of these companies is signing longer-term deals with customers that lock in prices and supply agreements for multiple years. This should eventually help them offset some of the cyclicity that the memory and data storage industry is known for.
Micron signed 16 strategic customer agreements in its fiscal third quarter, with cash deposits and financial commitments totaling $22 billion to date. Meanwhile, in its third quarter, Sandisk signed three contracts with total contractual revenue of at least $42 billion.
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The stock prices for both have pulled back over the past few days, but those retrenchments came on the back of strong runs upward. Thus far in 2026, while Nvidia shares have climbed by 11%, shares of Micron have performed much better; Micron's stock price is up nearly 200%, while shares of Sandisk have skyrocketed by almost 500%.
The short term looks a little uncertain amid an AI sector sell-off. Still, as there appears to be no end in sight to the deep mismatch between memory and storage supply and demand, both stocks could keep rewarding investors over the next several years.
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The Invesco QQQ Trust (NASDAQ:QQQ) trades near $720, up roughly 17% year to date and about 29% over the past year. Memory names like Micron Technology (NASDAQ:MU | MU Price Prediction) are up roughly 245% YTD while Microsoft has fallen about 20% in the same window. For anyone holding QQQ into the second half of 2026, two factors matter more than the fund’s 100-stock label suggests.
The Fund’s Current Position QQQ tracks the Nasdaq-100, but concentration at the top has rarely mattered more. NVIDIA (NASDAQ:NVDA) carries a $5.1 trillion market cap, with Microsoft at $2.86 trillion, Alphabet at $2.11 trillion, and Meta Platforms at $1.45 trillion. Morningstar notes the top 10 U.S. stocks account for over one-third of the market, up from 18% a decade ago. In QQQ that concentration is even tighter, meaning two factors will drive most of what happens to your position.
Macro Factor: The 10-Year Treasury Yield The most important macro variable for QQQ over the next 12 months is the 10-year Treasury yield, currently 4.62% and sitting in the 99th percentile of its 12-month range. The fed funds rate has been parked at 3.75% since December 2025. Growth stocks with earnings weighted years out are most sensitive to that long yield, and QQQ is essentially a portfolio of long-duration cash flows.
A sustained break above 4.75% on the 10-year would compress multiples on the top holdings fastest, while a retracement toward the February low of 3.97% would do the opposite. Check the FRED DGS10 series after every CPI print and FOMC meeting. The 10Y-2Y spread at 0.4% is still positive, so the market is not pricing recession; the real driver is the discount rate applied to Nvidia and Microsoft earnings in 2028 and beyond.
Fund-Specific Factor: AI Capex And Its Payback The specific factor for QQQ is whether AI infrastructure buildout inside its top holdings converts into revenue. Meta raised its FY26 capex guide to $125-145 billion, Microsoft spent roughly $31 billion in a single quarter, and Alphabet spent about $36 billion. On the revenue side, Micron’s fiscal Q3 came in at roughly $41 billion, up about 346% year over year, with GAAP gross margin at 84.6%, and Nvidia guided Q2 revenue to $91 billion. The payback is showing up, for now. Goldman Sachs frames the tension as an “uneasy equilibrium” where AI capex is masking softer parts of the real economy (a theme our 7 Stocks Powering the AI Boom research digs into further).
Monitor hyperscaler capex commentary on the next earnings calls. Alphabet, Microsoft, and Meta all report in late July; Nvidia reports in August. Any guide-down on 2026 or 2027 spend, or any hint that cloud revenue growth is decelerating faster than capex, would hit QQQ harder because these four names carry the fund.
The Signals That Matter If the 10-year Treasury settles below 4.30% while Q2 hyperscaler capex guidance holds firm, QQQ’s setup improves materially. If the 10-year pushes through 4.75% and any top four holding walks back 2027 AI spend, the fund’s 17% YTD gain is the cushion, and it will not last long. Investors seeking less AI concentration can look at equal-weight Nasdaq-100 or S&P 500 value funds as a hedge on the same macro view.
Contact [email protected] for any questions or corrections.
Memory chipmakers have been some of the biggest winners of the artificial intelligence (AI) boom in 2026. As large language models expand, memory has proven to be one of the biggest bottlenecks in many systems, driving insatiable demand for chips to package with AI accelerators and graphics processing units (GPUs).
That spike in demand has led to a commensurate spike in pricing since it takes a long time for chipmakers to expand their manufacturing capacity. The result is record profits for the handful of companies that make memory chips, such as Micron Technology (MU +0.04%) and SK Hynix (SKHY +0.48%).
Many investors have piled into these stocks on the belief that the current AI build-out is far from peaking. What's more, there's growing sentiment that the sharp earnings cycles that have plagued the industry for decades could be a thing of the past due to the structural demands of AI. As a result, investors should be willing to pay a higher price for the memory chipmakers' earnings today.
But investing legend John Templeton once shared a timeless piece of wisdom that Micron and SK Hynix investors should heed. Investors are at risk of making the same mistake many others have in the past.
Image source: Micron Technology.
The chorus is growing louder The four most dangerous words in investing are "this time it's different," according to Templeton. Templeton used the phrase as a warning against market bubbles and crashes in which valuations deviate from historical norms. The underlying reasoning that the market can support higher pricing or will never turn around always comes back to the same phrase: This time it's different. In fact, the more often you hear or read those words, the more skeptical you should become of their accuracy.
There's a growing chorus of investors claiming that this time it's different for memory chipmakers. Micron and SK Hynix are no longer selling the vast majority of their chips to consumer device manufacturers; they're going to AI hyperscalers. That's a huge structural shift in demand that removes much of the variability caused by consumer sentiment and macroeconomic factors, so the argument goes.
But such reasoning also suggests that this time it's different for the technology investment cycle. There are countless examples of massive capital spending projects ultimately collapsing: Railroad, telecom, and internet infrastructure are three of the most prominent. To think AI will be different is folly. That doesn't mean AI won't be a transformational technology, just as railroads, telecommunications, and the internet were, but it does mean the level of capital spending is unlikely to grow forever.
Even Micron's and SK Hynix's own actions suggest they see the risk of demand dropping. First, they were slow to start building new capacity. Now, with major capital spending and expansion plans underway, they've secured long-term customer agreements to help protect their pricing on the downside.
That may smooth out the earnings cycle somewhat, but it won't prevent the ultimate drop in earnings as chipmakers start depreciating their capital expenditures and incur higher operating costs as they bring new manufacturing capacity online. A decline in demand from the hyperscalers would lead to a severe decline in earnings for Micron and SK Hynix.
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The big challenge for Micron and SK Hynix Memory chips are particularly vulnerable to cyclicality because they are, for all intents and purposes, commodities. You can package a memory chip from Micron with a GPU, and it'll perform roughly the same as using a chip from SK Hynix. While there are only three main competitors in the DRAM memory chip space, the capacity they build will affect pricing for all of them.
After SK Hynix and Samsung Electronics announced plans to spend over $500 billion on a new facility in Korea and about $1.3 trillion on new capital investments over the next decade, Micron announced an increase in its investments to $250 billion through 2035.
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If the manufacturers don't invest now, they leave money on the table. But ultimately, that spending will result in lower profits for everyone as supply catches up to and exceeds demand. So far, the earnings cycle in memory chips has been far bigger than anything we've seen before. But that doesn't mean "this time it's different."
There's an important caveat to Templeton's warning that even he himself admitted: About 20% of the time, it really is different. Perhaps this is one of those instances, but it's impossible to know now. With the tremendous growth in Micron and SK Hynix over the past few months, investors may want to pare down their holdings or exercise significant caution before buying either stock at current levels.
SummaryMicron delivered a standout Q3, surpassing expectations and reaffirming a Buy rating amid a temporary tech sector pullback.MU's long-term supply agreements, Anthropic partnership, and $250B U.S. investment plan underpin a multi-year growth thesis and reduced cyclicality.Q4 revenue guidance of $50B and robust customer prepayments signal sustained demand, with DCF fair value estimated at $1,527.88 per share—over 50% upside.Risks include aggressive capacity expansions by Korean competitors and potential sentiment-driven volatility, but current valuation presents an attractive entry. JHVEPhoto/iStock Editorial via Getty Images
Last month, right before the release of the Q3 earnings report, I published a bullish article on Micron (MU) in which I stated that the upcoming report would be the company’s moment
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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.
Bohdan Kucheriavyi is not a financial/investment advisor, broker, or dealer. He's solely sharing personal experience and opinion; therefore, all strategies, tips, suggestions, and recommendations shared are solely for informational purposes. There are risks associated with investing in securities. Investing in stocks, bonds, options, exchange-traded funds, mutual funds, and money market funds involves the risk of loss. Loss of principal is possible. Some high-risk investments may use leverage, which will accentuate gains & losses. Foreign investing involves special risks, including greater volatility and political, economic, and currency risks and differences in accounting methods. A security’s or a firm’s past investment performance is not a guarantee or predictor of future investment performance.
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.
When Micron (MU +0.04%) debuted as a public company in 1984, it wasn't the only U.S. company making DRAM (dynamic random access memory). But in the years that followed, the other domestic chipmakers in that memory niche got out of it. Soon, though South Korea-based competitors remained, Micron was the only company in this space trading on U.S. exchanges.
That changed this month.
After a secondary listing of American depositary receipts (ADR) on the Nasdaq Exchange on July 10, SK Hynix (SKHY +0.48%) is now giving U.S. investors another stock to pick to capitalize on the memory market, a point that is particularly notable given data centers' currently insatiable demand for high bandwidth memory (HBM). With that in mind, should chip stock investors shift their focus to SK Hynix or stay with Micron?
Image source: The Motley Fool.
The case for SK Hynix When one looks at SK Hynix's market position, one can easily understand why this new stock offering is welcome. For one thing, it has just formed a partnership with Nvidia. This should give SK Hynix a clear advantage, as sales of its HBM chips will benefit from their integration with the hardware of the dominant player in the AI accelerator market.
Moreover, SK Hynix was the first company to produce HBM, beginning production in 2013, and it's still the largest producer. Today, it controls 56% of the HBM market on which Nvidia depends.
However, the memory chip market is also the most volatile part of the semiconductor industry. For now, memory makers can command premium pricing as demand for their offerings far outstrips what they can supply. However, they are all working to expand their production capacity. Eventually, supply should catch up to -- and likely exceed -- demand, sapping the companies' pricing power. In previous cycles, that has led to memory stocks experiencing steep sell-offs. Under those circumstances, SK Hynix's leading market share could work against it.
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Fortunately, the market is unlikely to see a glut of memory chips for some time. Amid the current shortage, SK Hynix's revenue rose 199% year over year in Q1. That followed a 47% increase in 2025. Also, its Q1 net income was $26.5 billion, a 397% year-over-year gain.
Despite that massive growth, it trades at a P/E ratio of 24. Admittedly, the historical volatility in the industry may make investors hesitant, especially those with little appetite for risk. Still, with no slowdown in sight for the AI infrastructure build-out that is powering memory demand, SK Hynix is in an enviable position.
Why investors might still prefer Micron stock Despite SK Hynix's positive attributes and higher market share, investors should not count out Micron. Considering its 42-year trading history, its longtime investors know well the attributes and the challenges that come with Micron and its industry.
Also, since Micron is based in the U.S., investors can own its shares directly rather than through an ADR. Although SK Hynix's shares are likely safe, the ADR arrangement means one owns shares in a holding company tied to SK Hynix rather than owning a part of the company itself. That factor might give Micron an advantage in the minds of some investors.
Still, Micron is behind the curve in other respects. It did not begin making HBM until 2021, which explains its smaller market share. Also, while Micron is a key Nvidia supplier, it has not built a strategically integrated partnership with the GPU maker in the way that SK Hynix has.
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However, Micron continues to benefit tremendously from the memory chip shortage. In its fiscal 2026 third quarter (which ended May 28), revenue rose by 346% year over year, well above its 202% growth across the first nine months of the fiscal year. Also, its net income for fiscal Q3 increased by almost 15-fold.
Despite those gains, Micron's P/E ratio is 20, a seemingly low valuation that's tempered by the industry's history of volatility. Like with SK Hynix, investors who have limited risk tolerance should avoid Micron. But those who are OK with some volatility could still add it to their portfolios.
Ultimately, an investor who wants to choose just one of these stocks should probably lean toward SK Hynix.
Micron offers U.S. investors a long track record and a lower valuation, and in recent years, it has delivered outsize growth. Thus, investors have little reason to sell their existing Micron shares unless they anticipate an industry downturn.
Nonetheless, SK Hynix is the market leader in HBM. Also, thanks to its alliance with Nvidia, it is more likely to hold a durable competitive advantage in this volatile market. Such attributes indicate that investors are likely better off putting new money to work in SK Hynix stock.
Some of Wall Street’s fastest-growing companies are turning expansion into something more tangible: cash.
Nvidia, Micron Technology, CrowdStrike and Palo Alto Networks have each reported sharp increases in operating or free cash flow while management or analysts lifted profit forecasts.
That combination provides stronger confirmation than an earnings beat alone because cash is available for research, acquisitions, buybacks and protection against downturns.
The catch is valuation, as these are financially strengthening businesses, but their shares already assume continued execution, leaving investors exposed if AI infrastructure, memory pricing or cybersecurity demand slows.
Nvidia generated a record $50.3 billion of operating cash flow in its fiscal first quarter, up from $27.4 billion a year earlier.
Free cash flow reached about $48.6 billion, giving the chipmaker ample room to fund product development, secure supply and support an additional $80 billion share-repurchase authorisation.
Consensus fiscal 2027 earnings estimates subsequently rose 14%, to $9.34 a share from $8.18.
KeyBanc analyst John Vinh raised his Nvidia target to $330 from $310 and retained an Overweight rating.
Writing in a note, Vinh said the CUDA software stack created “significant barriers to entry” and expected the Vera Rubin ramp to begin in July despite a slight delay.
Micron offers a more cyclical but faster-accelerating cash story. Fiscal third-quarter operating cash flow reached $25.39 billion, versus $4.61 billion a year earlier, while free cash flow hit $18 billion.
FactSet now expects fiscal 2026 earnings near $73.20 a share.
Long-term customer agreements provide added visibility, but Micron remains exposed to memory pricing and the industry’s history of overbuilding.
CrowdStrike’s fiscal first-quarter operating cash flow rose 54% to $590.9 million, while free cash flow increased nearly 68% to $468.5 million. Its free-cash-flow margin widened to 34% from 25%.
The cybersecurity company raised its fiscal 2027 adjusted earnings forecast to between $4.88 and $4.96 a share, from $4.78 to $4.90.
The improvement reflects the economics of its Falcon platform: customers can add identity, cloud and other security modules without CrowdStrike rebuilding its sales and infrastructure base for each product.
Morgan Stanley analysts said CrowdStrike still had room for further valuation expansion, while 22 brokerages raised targets after the quarter.
Yet the same report showed the stock trading at 138 times forward earnings.
That leaves little protection if annual recurring revenue, deal activity or cash conversion falls short of elevated expectations.
Palo Alto Networks generated $871 million of operating cash flow in its fiscal third quarter, up 39% from a year earlier.
Adjusted free cash flow climbed 57% to $910 million, while the trailing 12-month adjusted free-cash-flow margin expanded 4.3 percentage points to 38.5%.
Management raised fiscal 2026 adjusted earnings guidance to $3.77-$3.79 a share.
BTIG called Palo Alto its “top pick”, citing stronger momentum and larger contracts, while Wells Fargo raised its target to $420 and pointed to a “clear catalyst path.”
The platformisation strategy encourages customers to consolidate network, cloud, identity and AI-security tools with one provider, supporting recurring revenue and cash generation.
However, CyberArk and Chronosphere contributed $388 million of quarterly revenue, and adjusted cash flow excludes some acquisition-related costs.
The explosive growth of artificial intelligence (AI) has ignited a powerful supercycle in the memory semiconductor landscape. As large language models (LLMs) and generative AI systems scale to trillions of tokens, the bottleneck is shifting from raw compute to the speed and capacity of data movement.
Nvidia (NVDA 1.97%) is a dominant force in this ecosystem, not merely as the leading designer of graphics processing units (GPUs) but as the primary driver of demand for specialized high-bandwidth memory (HBM). The company's GPUs support the majority of hyperscale training clusters and inference workloads, forcing memory producers to align their roadmaps with Nvidia's performance targets.
Image source: Nvidia.
Three companies possess the technology and manufacturing expertise to produce HBM4 at scale: SK Hynix (SKHY +1.13%), Samsung, and Micron Technology (MU +0.04%). Each company is aggressively expanding capacity and refining its manufacturing processes to meet Nvidia's specifications.
Nvidia CEO Jensen Huang is taking the memory supercycle incredibly seriously. Over the last couple of years, Huang has quietly dropped some breadcrumbs that can be traced to Nvidia's favorable memory suppliers. Let's take a look at what Huang has to say about the memory bottleneck, and explore which AI memory stock you may want to put on your radar right now.
Why is memory becoming so important for AI? Memory is emerging as one of the most important components in the chip stack because AI applications are fundamentally memory-bound. Training and running models require transferring enormous volumes of data between hundreds of thousands of GPUs at extremely low latency.
Conventional DRAM struggles to keep pace with these bandwidth demands, leading to underutilized compute resources and longer training times. HBM solves this by stacking DRAM dies and stitching them together through vertical interconnects. This delivers bandwidth that is meaningfully higher than that of traditional memory solutions while consuming less power.
HBM4 represents the next step forward in the memory evolution. Nvidia requires HBM4 to power its next-generation platforms because these chips enable larger model sizes, faster token generation, and more efficient scaling of GPU clusters. In particular, Nvidia's Vera Rubin architecture is expected to rely heavily on HBM4 to deliver the performance leap customers anticipate.
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SK Hynix is expected to be the leader of HBM4 During CES back in January, Huang said that Nvidia will be the "only customer" of HBM4 for quite some time. While that's great news for memory suppliers, it's especially beneficial for one company in particular.
In early June, Nvidia and SK Hynix announced a multiyear partnership focused on co-developing advanced memory solutions for AI factories. This isn't entirely surprising, as Huang has been relentlessly pursuing SK Hynix's memory wafers for years.
According to reports dating back to 2024, Huang had asked SK Hynix to expedite its HBM4 manufacturing by six months. While SK Hynix plans to double its wafer capacity by 2030, Huang warns this may not be enough supply given the explosion of AI workloads. Huang explains:
AI factories are the engines of the next industrial revolution, and advanced memory is essential to their performance. SK Hynix has been an extraordinary partner to Nvidia, playing a central role in delivering advanced memory technologies for Nvidia AI computing platforms. Together, we will codevelop the next generation of memory for AI factories and support the accelerating global expansion of AI infrastructure -- from frontier model training to agentic and physical AI.
Against this backdrop, industry analysts estimate that SK Hynix could lock in between 50% and 70% of Nvidia's anticipated HBM4 orders. This outsize allocation would provide SK Hynix with durable revenue tailwinds as the company stands to capture a disproportionate share of HBM revenue while its competitors ramp up their own capacities. With this in mind, SK Hynix's strengthening relationship with Nvidia could be seen as a subtle competitive advantage.
For investors seeking exposure to the memory pocket of the AI infrastructure theme, SK Hynix appears to be one of the clearest beneficiaries of sustained demand over the coming years. This makes the stock worth a look as growth investors continue to take profits and rotate out of the obvious winners seen so far during the AI revolution.
Space Exploration Technologies (SPCX 5.41%) and Micron Technologies (MU +0.04%) are two of the most popular stocks on the market, but CFRA analysts think they are headed in opposite directions.
Keith Snyder at CFRA has a sell rating on SpaceX. His target price of $115 per share implies 12% downside from its current share price of $131. Angelo Zino at CFRA has a buy rating on Micron. His target price of $1,500 per share implies 76% upside from its current share price of $853. Here's what investors should know about these popular stocks.
Image source: The Motley Fool.
SpaceX: 12% downside implied by CFRA's target price SpaceX dominates the global space industry. The company accounted for more than 80% of spacecraft launches last year, and it has fired more satellites into orbit than the rest of the world combined. SpaceX's competitive advantage lies in reusable rockets. Its Falcon 9 rocket cut launch costs by 85% compared to the historical average, and its next-generation Starship will reduce costs by 99%.
"Central to our cost advantage is the reusability of key hardware -- most notably boosters -- which we recover, refurbish, and refly many times instead of discarding after single use," SpaceX explained in its Form S-1. "This dramatically lowers per-launch costs by minimizing hardware replacement expenses and spreading fixed production costs across repeated uses."
SpaceX has leaned on its ability to launch rockets quickly and efficiently to build Starlink, the largest space-based internet service. Starlink has more than 10,000 satellites in orbit, and it serves 12 million subscribers. Recently, the company set its sights on mobile connectivity, where it may challenge AT&T and Verizon. Tim Horan at Oppenheimer writes, "SpaceX will disrupt the $1.6 trillion communications industry."
SpaceX's first-quarter financial results were unimpressive. Revenue increased 15% to $4.6 billion. Sales in the connectivity segment (i.e., Starlink) grew quickly, but that was offset by weaker sales growth in the artificial intelligence segment and a sales decline in the space segment. The company also reported a net loss of $4.2 billion, much worse than its $528 million loss in the previous year.
However, SpaceX's revenue growth should accelerate in the coming quarters, particularly in the AI segment. The company recently signed cloud services agreements with Anthropic and Alphabet's Google, which will rent AI infrastructure for monthly fees of $1.25 billion and $920 million, respectively.
The problem is valuation. SpaceX trades at 88 times sales. That makes it more expensive than every other stock in the S&P 500 (^GSPC 1.01%) and Nasdaq-100, which leaves plenty of room for downside.
I think patient investors can buy a small position today, but the keyword is small. Despite trading below its IPO price of $135 per share, the stock is still risky.
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Micron Technology: 76% upside implied by CFRA's target price Micron develops memory and storage solutions across four end markets: automotive, data center, cloud, and mobile. The company manufactures DRAM products, including high-bandwidth memory (HBM), which serves as working memory for artificial intelligence tasks. Micron also builds NAND flash products, which serve as long-term storage for training data and models.
In terms of market share, Micron trails the industry leaders Samsung and SK Hynix in DRAM and NAND. But the company is still growing quickly because demand for memory far exceeds supply. In fact, the supply shortage is so severe that DRAM and NAND prices have increased about 90% and 110%, respectively, in the past year.
Micron's third-quarter fiscal 2026 (ended in May) financial results trounced Wall Street's estimates. Revenue increased 345% to $41.4 billion due to particularly strong growth in the data center segment, which serves non-hyperscalers. Meanwhile, non-GAAP (generally accepted accounting principles) net income surged 1,215% to $25.11 per diluted share.
CEO Sanjay Mehrotra delivered great news during the conference call. Micron has now signed 16 long-term supply agreements (i.e., three to five years) that offer some downside protection in a historically cyclical industry. Those deals generally include minimum pricing terms and binding commitments to purchase specific volumes.
So what? The memory chip industry has traditionally run on boom-and-bust cycles. Periods of robust demand (and price hikes) have generally preceded periods of weak demand (and price cuts). That led to substantial volatility.
For instance, Micron's sales fell 50% in fiscal 2023. But multiyear supply agreements should limit downside during the next industry downturn.
Micron currently trades at 10.7 times sales, a big premium to the five-year average of 4.7 times sales. But that valuation is quite reasonable, perhaps even cheap, for a company whose sales are forecast to grow at 115% annually through fiscal 2027 (ends in August). Micron stock is currently 30% below its high, and investors should consider buying the dip.
Sandisk (SNDK 3.99%) is the S&P 500's (^GSPC 1.01%) best-performing stock so far this year. It's up 580%, easily outpacing the next-best performers, which are up by just over 200%. After a rally like that, it would be pretty easy to assume that you've missed the boat on Sandisk.
However, if you're looking for smart chip stocks to add to your portfolio amid the AI build-out, a few still look like great buys, including Micron Technology (MU +0.04%) and Nvidia (NVDA 1.97%). But perhaps surprisingly, so does Sandisk.
In my view, the market is currently discounting all three of these tech companies.
Image source: Getty Images.
Sandisk and Micron Just because a stock has run up a ton doesn't mean it can't go higher. That's the case with both Micron and Sandisk. Both stocks have been stellar performers so far in 2026, but I don't think they're done quite yet. The business outlook for each of these companies is strong, and that type of real growth is what's necessary to propel them to new heights.
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Micron and Sandisk produce memory chips for computing applications: Micron makes NAND and DRAM memory, while Sandisk specializes in NAND. NAND memory is used for long-term data storage (like in solid-state drives) while DRAM provides high-speed memory of the type that is commonly used alongside a computing unit for rapid information access. Both types of memory are vital in data centers, and with data center growth soaring, both Sandisk and Micron stand to benefit.
However, there isn't enough production capacity in the entire memory chip industry to satisfy current demand, and the resulting shortages have caused their prices to skyrocket. This won't be remedied anytime soon, as it takes years to build new chip foundries. Micron's management has forecast that the memory market will remain tight beyond 2027. That bodes well for both of these stocks over at least the next year and a half, and based on their cheap price-to-earnings valuations, they look like solid investments now.
SNDK PE Ratio (Forward) data by YCharts.
While both Micron and Sandisk are well off their all-time highs, the memory chip supply crunch isn't going away anytime soon. That will allow each company to extend its incredible growth over a longer time frame, benefiting shareholders big-time.
Nvidia Nvidia has been a top option to invest in throughout the AI arms race, but the stock's performance has been less inspiring so far in 2026. However, that doesn't mean that the company isn't doing great. In fact, business is booming. Revenue was up 85% last quarter, and next quarter, Wall Street expects nearly 100% revenue growth. That's pretty good for a company that's already the world's largest by market cap. With the AI data center build-out expected to ramp up further next year, Nvidia is sitting in a perfect spot to take advantage of a global opportunity.
Given Nvidia's successful track record and its growth rates, investors might expect the stock to be trading for 30 to 40 times forward earnings -- the range in which it has traded during the back half of the year over the past few years. However, today, Nvidia trades at just 23.7 times forward earnings.
NVDA PE Ratio (Forward) data by YCharts.
At that level, the market isn't pricing in any of the company's expected success in 2027, despite Wall Street analysts guiding for 42% revenue growth that year. That makes Nvidia a perfect stock to scoop up now before the market catches on to its undervaluation. I think it could soar later this year when the hyperscalers announce their capital expenditure plans for 2027.
Key Takeaways The Q2 earnings season has started off strong, with many S&P 500 companies reporting in the coming weeks. Two companies - Micron and Nvidia - are massive contributors to the Tech sector's robust growth expectations. S&P 500 earnings for 2026 Q2 are expected to increase by 25.3% on 11.9% higher revenues YoY. We are off to a strong start this Q2 earnings season, which accelerates significantly this week as more than 300 companies report results—including 85 S&P 500 members. This week’s lineup offers a highly representative cross-section of the market, featuring key players from all sectors alongside two prominent "Magnificent Seven" members: Tesla and Alphabet. By Friday, we will have a much clearer picture of corporate health, with results in from more than a quarter of the entire index.
The picture emerging from early results is one of continued strength and solid momentum. An above-average proportion of companies are beating estimates, while management teams are offering reassuring commentary regarding their outlooks for the current and upcoming periods. Although we are still in the early stages of the Q2 reporting cycle—with results in from roughly 10% of S&P 500 members—the initial data gives us strong confidence that the broader corporate earnings landscape remains highly positive.
The chart below gives you a big-picture view of the overall earnings picture. It highlights current Q2 expectations right alongside actual results from the past four quarters and forecasts for the next three.
Image Source: Zacks Investment Research
As you can see here, total S&P 500 earnings for 2026 Q2 are expected to increase by +25.3% compared to the same period last year on +11.9% higher revenues.
Of the 16 Zacks sectors, 11 are expected to have positive earnings growth in Q2, with Energy (earnings growth of +129.5%), Tech (+48.8%), Basic Materials (+45.2%) and Finance (+23.5%) as the major growth drivers.
Q2 earnings growth drops to +14.1% from +25.3% once the Tech sector’s substantial contribution is excluded.
The +129.5% earnings growth for the Energy sector is meaningful, but aggregate earnings growth would still be +20.7% on an ex-Energy basis.
For the Magnificent Seven—two of whose members report this week—total Q2 earnings are expected to increase +28.7% year-over-year on +25.1% higher revenues. While this marks a deceleration from the group’s blistering +48.7% earnings growth (on +25.3% revenue gains) in Q1, their fundamental strength remains a major market driver. Crucially, there is plenty of strength outside of the group: if we exclude the Magnificent Seven entirely, Q2 earnings for the rest of the S&P 500 would still be up a robust +24.3%.
The Tech sector has been a pillar of earnings growth over the last two years, and it is expected to continue playing that role in Q2 and beyond. The chart below shows current earnings and revenue growth expectations for the sector relative to what it actually reported in the preceding two periods and what is expected over the following three quarters.
Image Source: Zacks Investment Research
The Tech sector is unlike the other 15 Zacks sectors, as it alone brings in 41% of all S&P 500 earnings and accounts for 45.6% of the index’s total market capitalization. Semiconductors as a whole and two companies in that industry in particular are playing a material role in the Tech sector’s current growth profile.
These two companies are Micron Technology (MU - Free Report) and Nvidia (NVDA - Free Report) . Micron has already reported Q2 results, with earnings up +1350.1% on +345.7% higher revenues. Excluding the contribution from Micron and Nvidia, Q2 earnings for the rest of the Zacks Tech sector would be up +25.3% (vs. +48.8% otherwise).
The chart below shows the contribution of these two companies to the Tech sector’s growth profile.
Image Source: Zacks Investment Research
The chart below shows the earnings picture on an annual basis.
Image Source: Zacks Investment Research
As with Q2 expectations, the Tech sector has an outsized impact on the annual earnings picture as well. Total Tech sector earnings are expected to increase +40.1% from the same period last year on +18.3% higher revenues.
Excluding the Tech sector’s substantial contribution, total earnings for the year would be up +12.7% (vs. +22% otherwise).
As we saw with Q2 expectations, contributions from Micron and Nvidia are also significant here, as the chart below shows.
Image Source: Zacks Investment Research
The way to read this chart is that the +22% earnings growth expected in 2026 drops to +12.7% once the Tech sector is excluded and +15.5% once only Nvidia and Micron are excluded from the index.
Q2 Earnings Season ScorecardThrough Friday, July 17th, we have already seen quarterly results from 49 S&P 500 members. Total earnings for these 49 index members that have reported results are up +48.7% from the same period last year on +15.1% revenue gains, with 91.8% of the companies beating EPS estimates and 79.6% of them beating revenue estimates.
The comparison charts below put the Q2 earnings and revenue growth rates for these index members in a historical context.
Image Source: Zacks Investment Research
The comparison charts below put the Q2 EPS and revenue beats percentages in a historical context.
Image Source: Zacks Investment Research
As you can see above, the Q2 EPS beats percentage for this group of 49 index members is a new 5-year high, while the revenue beats percentage is very close to the 5-year high.
The unusually strong earnings growth rate of +48.7% and revenue growth of +15.5% are benefiting from Micron’s blockbuster quarter results. The comparison charts below show the growth picture on an ex-MU basis.
Image Source: Zacks Investment Research
For a detailed view of the evolving earnings picture, please check out our weekly Earnings Trends report here >>>> Early Q2 Results Show a Highly Robust Earnings
Characteristics and Risks of Standardized Options: https://bit.ly/2v9tH6D. Micron's (MU) dependence on the AI buildout is something Kevin Hincks attributes as a bullish and bearish narrative for the stock.
Launched on Wednesday, the ETF targets companies across the memory ecosystem that are expected to benefit from rising demand for artificial intelligence (AI) infrastructure and high-performance computing.
• XFUNDS Memory Income ETF stock is showing downward bias. What’s ahead for DRMY stock?
The launch comes as memory chips remain a key investment theme amid accelerating AI adoption, with demand for technologies such as high-bandwidth memory and advanced storage solutions continuing to rise.
According to XFUNDS CEO David Nicholas, memory has become a critical layer of AI infrastructure, extending investment opportunities beyond chip manufacturers to the broader ecosystem. He said DRMY was designed to give investors access to that growth while also pursuing current income through an actively managed options overlay that seeks to deliver weekly cash distributions.
Key features of XFUNDS Memory Income ETF (DRMY):–Investment objective: Seeks capital appreciation from memory semiconductor companies while generating income through an options-based strategy
–Expense Ratio: 1.01%
–Portfolio focus: Companies involved in the development, manufacturing and enablement of memory technologies
–Memory segments covered: High-bandwidth memory (HBM), dynamic random-access memory (DRAM), NAND flash memory, solid-state drives (SSD), NOR flash memory, hard disk drives (HDD), and specialty, application-specific or embedded memory products
–Stock selection: Uses a proprietary process to identify companies positioned to benefit from AI- and high-performance computing-driven memory demand
–Income strategy: Employs options on individual portfolio holdings, including synthetic covered calls and credit calls, and put spreads
–Distribution goal: Aims to provide weekly cash distributions
Photo: Shutterstock
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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Micron Technology (MU +3.05%) has delivered stellar returns to investors over the year, with its shares rising by an incredible 633% over this period. However, the memory specialist has seen a steep 30% pullback from the 52-week high it reached last month.
This drop in Micron stock seems quite surprising. After all, the company delivered blowout results just last month that should ideally have supercharged the stock. However, investors have been rotating out of memory stocks lately, as evidenced by the 23% drop in the Roundhill Memory ETF over the past month.
Savvy investors, however, should consider buying Micron following its recent pullback as it could become a long-term winner. Let's see why.
Image source: Micron Technology.
Micron will continue benefiting from the rapidly growing memory chip demand Memory is essential for compute and storage in artificial intelligence (AI) data centers, computers, smartphones, vehicles, and other applications. AI, in particular, has supercharged the demand for this commodity.
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Compute memory, known as dynamic random-access memory (DRAM), is being deployed extensively to transport enormous data sets in AI data centers and chip clusters. Similarly, storage-oriented NAND flash is also experiencing strong demand to store the massive amounts of data needed for AI model training and inference.
However, there isn't enough supply available to meet the booming demand. According to Micron peer SK Hynix, the memory supply crunch will worsen in 2027. Moreover, the South Korean giant projects that memory demand will continue to exceed supply even after 2030. Clearly, AI has brought about a structural change in the memory industry that will ensure manufacturers like Micron deliver reliable, consistent long-term growth.
That's precisely why it seems like a good time to buy this semiconductor stock following its recent drop.
The stock can make investors significantly richer over the long run The undersupplied memory market gives Micron an upper hand in setting the price of its chips. It is well known that memory chip prices have jumped significantly in the past couple of years, and the continued shortage should ensure that the strong pricing environment persists. As a result, Micron's rapid earnings growth won't slow down.
Data by YCharts
Micron is currently in its final quarter of fiscal 2026. Analysts are forecasting a 785% jump in earnings per share this fiscal year to $73.37. Its earnings are projected to more than double in the next fiscal year, followed by a slower increase in fiscal 2028.
Data by YCharts
Analysts are predicting a much smaller increase of 9% in Micron's earnings in fiscal 2028, as seen in the above chart. Of course, there is enough evidence to suggest that Micron could do better than that, fueled by the memory chip shortage expected to last a long time. But even if Micron clocks just 10% in earnings growth in fiscal years 2029 and 2030, its bottom line could jump to $198.26 per share in four years.
Even if Micron trades at just 10 times earnings at that time, a significant discount to the S&P 500 index's earnings multiple of 25.6, its stock price would go up to nearly $2,000 over the long run. That's more than double the current stock price. What's worth noting is that I have assumed extremely low earnings growth for Micron beyond the next fiscal year, which is why I expect it to trade at a discounted valuation in 2030.
This means Micron could reliably deliver solid long-term upside, which is why it is worth buying the stock hand over fist before it goes on a bull run.
Micron Technology, Inc. is reiterated as a Strong Buy, driven by surging AI-driven memory demand and a structural shift to long-term contracts. MU benefits from a multi-year supply shortage, higher-for-longer memory pricing, and robust margin expansion, with net margins recently reaching the high-60% range. Analyst consensus expects revenue to grow 246% this year and net income to nearly triple by 2030, with annualized returns estimated at 24%.
SummaryMicron Technology, Inc. has seen a massive selloff, with shares now under $850, presenting a completely different risk-reward profile versus a month ago.Recent price declines are attributed to technical factors, including leveraged ETFs and sector rotation, rather than fundamental weakness in MU’s business.Growth outlook remains robust: Q3 revenue surged 73.7% sequentially to $41.46 billion, with gross margins at 84.9% and EPS expected to ramp further.MU’s backlog extends six quarters+, demand is unprecedented, and consensus FY27 EPS of $150 implies a forward multiple of just 5.6x.Looking for more investing ideas like this one? Get them exclusively at BAD BEAT Investing. Learn More » solarseven/iStock via Getty Images
We last covered Micron Technology, Inc. (MU), where we discussed fiscal Q3 earnings. We assigned a Hold rating at the time of publication, when shares were then pushing over $1200 after the earnings.
But a
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Analyst’s Disclosure: I/we have a beneficial long position in the shares of MU either through stock ownership, options, or other derivatives. 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.
Micron (Nasdaq: MU | MU Price Prediction) fell again yesterday, trading intraday between $873.63 and $982.40 and changing hands around $876, a decline that has taken the stock roughly 27-29% below the nearly $1,200 high it touched in June 2026. Although that sounds like a severe move, it looks almost trivial zoomed out to ten years: as shown in Chart 1, the stock’s entire prior trading range sits well below the spike that began late last year, and the current pullback barely registers against the scale of the move that preceded it.
MU data by YCharts
Reports that Chinese memory maker CXMT is preparing an $8.55 billion IPO are being cited as the proximate cause of today’s decline, along with reports that AI cloud provider CoreWeave is exploring financial hedges against a potential drop in memory costs. Overall, the decline is also consistent with broader profit-taking across a semiconductor sector that gained roughly 82% in the first half of 2026, as measured by the SOXX (NASDAQ: SOXX).
A Correlation I Documented in 2018 I first laid out the relationship between Micron’s stock and the DRAM spot price in a June 2, 2018, Seeking Alpha article entitled “Micron: First Price Fixing, Now Antitrust Allegations By The Chinese Government.” That piece was written around China’s National Development and Reform Commission opening a formal antitrust probe into Micron, Samsung, and SK hynix over suspected DRAM price collusion during the 2016-2018 supercycle. Although the article was about a regulatory threat and not a chart, the correlation shown in Chart 2, Micron’s share price against the DDR3/DDR4 spot price, held in near lockstep from 2015 through mid-2018.
Chart 2: Micron share price vs. DDR3/DDR4 spot price, 2015-2018, from the 2018 article
What has changed in the eight years since is the mechanism, not the actor. In 2018, Chinese regulators tried to cap DRAM pricing power directly, through an antitrust investigation. In 2026, a Chinese competitor is trying to compete that pricing power away instead. Importantly, both episodes put a Chinese government-linked actor at the center of the story; in the current one, it is showing up in Micron’s stock price before it is showing up in the ASP (Average Selling Price) data.
DRAM ASPs at a Ten-Year High According to The Information Network’s tracking of Micron’s DRAM average selling prices, shown in Chart 3, 2Q26 ASPs are running at approximately $1.17, above the prior cycle peak of roughly $0.87 in 3Q18-4Q18, and the highest point in the ten-year series.
Chart 3: Micron DRAM average selling prices, 1Q16-2Q26
That peak in 2018 was followed by one of the worst downcycles in the company’s history:
ASPs fell from roughly $0.87 to $0.35-0.39 through 2019-2020, a decline of more than 55%. ASPs recovered modestly to roughly $0.47 in 2021-2022, but fell again. ASPs bottomed around $0.19-0.20 by early 2024, low enough that Micron posted GAAP losses for several quarters. From that 2024 trough, ASPs have roughly tripled. The move is not specific to Micron. In fact, conventional DRAM contract prices rose an estimated 93-98% quarter-over-quarter in Q1 2026 alone. Samsung’s DRAM ASP rose more than 90% quarter-over-quarter over the same period, with Q2 growth estimated at 50-60%, and the company is reportedly seeking a further 20% increase for Q3, with LPDDR hikes potentially running higher still. SK Hynix disclosed Q1 ASP gains in the mid-60% range. The benchmark DDR4 8Gb spot chip hit an all-time high of roughly $20 in May, up 25% from April, according to DRAMeXchange data going back to 2016.
Micron’s own actions indicate management views the pricing as durable rather than transitory. On June 25, the company locked in what has been described as historically high memory prices in supply agreements running out five years, not the posture of a company hedging against a near-term reversal. On the fiscal Q3 2026 earnings call, CEO Sanjay Mehrotra stated that supply constraints are expected to “persist beyond calendar 2026,” with market tightness “locked in to persist beyond calendar 2027,” and that Micron expects to meet only “half to two-thirds” of demand from its key customers. Mehrotra further indicated that long-term agreement pricing for DRAM now ranges from the “low teens to mid-$20s a gigabyte,” and that gross margins at the floor of the current cycle would be “well beyond the peaks” the company has previously experienced. Micron’s DRAM revenue reportedly reached a record $31.3 billion in the most recent quarter, up 343% year over year.
What Happened After the Last Two Peaks Micron has been through comparable ASP peaks twice before in the past decade, and in both cases the stock eventually converged with the ASP chart rather than the reverse:
After the 2018 peak, ASPs fell more than 55%, and Micron’s stock declined with them through 2019, ahead of the broader market’s 2020 selloff. After the smaller 2022 peak, ASPs fell to roughly $0.19-0.20 by early 2024, and the stock spent nearly two years underwater before the current cycle began. In both instances, the ASP chart led and the stock chart followed it down. That history argues against dismissing the current stock decline as pure overreaction. Although Micron’s five-year pricing lock is a structurally different commitment than the company held heading into either prior downturn, and AI-driven server and HBM (High Bandwidth Memory) demand is, in my view, a more durable end market than the smartphone and PC replacement cycles that drove the 2018 and 2022 peaks, whether that difference is enough to break the pattern rather than merely delay it is the question the next two quarters will answer.
Why the Stock Is Falling Anyway Three factors are being cited for today’s decline specifically. CXMT, already the world’s fourth-largest DRAM producer, is reportedly preparing an $8.55 billion IPO, which investors are reading as a signal of accelerating Chinese domestic DRAM capacity, a longer-horizon threat to pricing power independent of current contract prices. Reports that CoreWeave, a large AI-cloud buyer of memory, is exploring financial hedges against a future decline in memory costs are arguably more informative than a sell-side downgrade, since they imply a sophisticated buyer views current pricing as closer to a peak than a floor. Overall, broad sector-wide profit-taking following the SOXX’s 82% first-half gain has hit KLA Corporation (KLAC), Western Digital Corporation (WDC), and Seagate Technology Holdings plc (STX) alongside Micron.
There is also a rate-of-change signal worth noting. The pace of DRAM price increases appears to be decelerating even as the absolute price continues to rise, with some reporting tying May’s all-time-high print to a slowing quarter-over-quarter rate of increase as PC OEM deals closed. A price still rising, but rising more slowly, is exactly the kind of second-derivative signal a sophisticated buyer such as CoreWeave would act on well before it shows up in the spot price itself.
The selloff has not been confined to Micron. Comparing recent moves across the memory and storage complex:
SK hynix fell approximately 15% in a single session after South Korean brokerage KIS published a Q2 profit estimate roughly 8% below consensus, citing a slower-than-expected HBM4 shipment ramp. Western Digital (NASDAQ: WDC) fell approximately 6% and Seagate (NASDAQ: STX) fell approximately 7% in sympathy sessions tied to broader memory supply-glut concerns. SanDisk (NASDAQ: SNDK) fell approximately 11% in a separate session on the same concerns and is off roughly 30% from its 52-week high, although it remains up more than 600% year to date. KLA Corporation (NASDAQ: KLAC) fell 12% intraday on broad semiconductor profit-taking, followed by declines of 6.56% and 4.93% in subsequent sessions, even though management has flagged surging DRAM prices as a gross-margin headwind, meaning falling memory prices should, on KLA’s own disclosed economics, improve rather than harm its margin outlook. The KLA case is worth isolating. A stock falling for a reason that contradicts its own disclosed cost structure indicates indiscriminate selling across a sector label, not a reassessment of that specific company’s earnings power.
Investor Takeaway The bull case rests on current, hard data: record ASPs, a five-year pricing lock Micron itself just signed, management’s own commentary that supply tightness persists beyond 2027, and 343% year-over-year DRAM revenue growth. The bear case rests on forward-looking behavior from a sophisticated buyer, CoreWeave’s hedging activity, plus a multi-year Chinese competitive overhang from CXMT that compresses forward multiples today regardless of when it fully materializes.
I expect the next two data points to resolve which side is right. First, whether Samsung’s reported push for a further 20% DRAM price increase in Q3 2026 actually holds. Second, whether Micron’s next earnings call indicates hyperscaler order books are being renegotiated in light of CoreWeave-style hedging. If the Q3 price increase holds and order books stay firm, I would expect the stock to close the gap with the ASP chart by moving higher, consistent with the correlation I documented in 2018. If the increase is delayed or discounted, that would be the first evidence that the stock, not the ASP chart, is the accurate leading indicator this time.
Contact [email protected] for any questions or corrections.
Azure’s PlaybookTengler acknowledged that Micron’s industry-leading margins may not remain at current levels, but argued that margin normalization shouldn’t automatically be viewed as a warning sign.
“Am I concerned that margins could go down to 70%?” Tengler asked. “The market will hate it, but this is what happened with Microsoft during the launch and momentum of Azure. There was a time when Azure was growing at 92%, and the stock continued to outperform for a number of years even after growth began decelerating. That’s the law of large numbers.”
The comparison is less about Microsoft’s cloud business and more about how investors tend to react when hypergrowth inevitably slows.
As businesses scale, maintaining triple-digit growth or record profitability becomes mathematically harder. Markets often interpret that slowdown as the beginning of the end, even when the underlying business continues to strengthen.
Tengler argues Micron could be entering a similar phase.
Why Micron’s Story May Be Different This TimeThe portfolio manager also pointed to another development she believes investors shouldn’t overlook. “I don’t view it too seriously when I look at a company like Micron, which is now signing three-year contracts and has margins of 84%,” she said.
For decades, memory stocks have been known for sharp boom-and-bust cycles driven by supply gluts and volatile pricing. Multi-year supply agreements with AI customers could signal a more durable demand environment, reducing some of the earnings volatility that has historically defined the industry.
That doesn’t mean Micron is immune to cyclical pressures. Instead, Tengler believes investors should focus less on whether margins retreat from today’s extraordinary levels and more on whether AI demand continues to create a structurally larger market for high-bandwidth memory and advanced DRAM products.
Looking Beyond The Next QuarterTengler also pushed back against concerns surrounding heavy AI investment across the technology sector, arguing that capital spending funded by strong cash generation should be viewed differently than debt-driven expansion. “I think capex spending is a sign of strength… you still have some of these mega-cap companies generating tens of billions of dollars in free cash flow every year, even after spending tens of billions of dollars.”
That philosophy extends to Micron.
Rather than chasing the stock after its recent run, Tengler said volatility should be expected during what she described as the “fourth industrial revolution.” “I think you use it as an opportunity if you’re a long-term believer… I’m not going to chase it here, but if it continues to decline, we will, in fact, step in.”
Her broader message is that investors may be asking the wrong question. Instead of trying to pinpoint when Micron’s margins peak, Tengler suggests looking at how other transformative AI businesses have evolved. If Microsoft’s Azure story is any guide, slowing growth and moderating margins may be less a sign of fading momentum than the natural price of becoming much bigger.
Image via Shutterstock
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The stock market faces pressure from several angles to end the trading week. Tom White talks about the continuing selling hitting AI stocks, especially in the memory space with Micron (MU) and SanDisk (SNDK), as both stocks trade more than 30% below its all-time high. More U.S. strikes on Iran also aren't doing any favors to alleviate fears that energy volatility will shake commodities again. Tom also discusses Netflix's (NFLX) earnings and subsequent sell-off, along with recent trading action in SpaceX (SPCX).
Shares of memory-related companies traded lower on Thursday after reports suggesting that a U.S. House Committee has urged the Trump administration to ban Chinese memory chips, which may prove disruptive to established supply chains.
Malcolm Ethridge, managing partner at Capital Area Planning Group, picked Rocket Companies, Inc. (NYSE:RKT).
Lending support to his choice, Morgan Stanley analyst Jeffrey Adelson, on Thursday, upgraded Rocket Companies from Equal-Weight to Overweight and raised the price target from $18 to $19.
Don’t forget to check out our premarket coverage here
Janine Stichter recommended iShares U.S. Healthcare ETF (NYSE:IYH).
Joshua Brown, co-founder and CEO of Ritholtz Wealth Management, picked Apple Inc (NASDAQ:AAPL)
According to recent news, Apple received regulatory approval for its on-device generative artificial intelligence service, Apple Intelligence, from China’s cyberspace regulator.
Price Action:
Micron shares dipped 5.7% to close at $853.20 on Thursday. Rocket Companies shares gained 2.1% to settle at $14.90 during the session. iShares U.S. Healthcare ETF gained 2% on Thursday. Apple shares rose 1.8% to settle at $333.26 during the session. Photo via Shutterstock
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AI infrastructure spending has become a supply-constrained reality. The obvious beneficiaries get all the headlines, but the second-derivative winners sit one layer over: memory, networking and power delivery. Each is a bottleneck for the hyperscaler build-out, and each has a distinct catalyst hitting this month. Here are three semiconductor names with tool-verified fundamentals that give investors diversified exposure to the AI stack heading into July earnings season.
Micron Technology (MU) Micron Technology (NASDAQ:MU | MU Price Prediction) is the memory pure-play catching the full HBM wave. Shares traded around $851.21 on July 16, up nearly 170% year to date. That still leaves the stock roughly 30% below its 52-week high of $1,254.81, an unusual setup given the underlying numbers.
Fiscal Q3 2026 was a blowout. Revenue landed at $41.46 billion, up 345.7% year over year, beating consensus by 17.6%. Non-GAAP EPS came in at $25.11 versus $20.28 expected, the seventh straight beat. GAAP gross margin expanded to 84.6% from 37.7%, and free cash flow hit $18.3 billion. Q4 guidance calls for revenue of $50 billion and non-GAAP EPS of $31 at the midpoint, with roughly 86% gross margin.
The bull case is structural. Micron is in volume shipment of HBM4 36GB 12-Hi designed for NVIDIA Vera Rubin, with HBM4E slated to ramp in calendar 2027. CEO Sanjay Mehrotra said the company has now “signed our first five-year SCA”, part of a wave of multi-year Strategic Customer Agreements that lock in visibility. Management is fulfilling “only 50% to two-thirds” of key customer demand. Analyst consensus reflects this: 89% bullish with 31 Buy ratings and a $1,486 target.
Risk: memory has historically been cyclical, and Micron plans fiscal 2026 CapEx above $25 billion with fiscal 2027 stepping meaningfully higher. If AI infrastructure spending pauses, the fixed-cost base becomes a burden fast.
Marvell Technology (MRVL) Marvell Technology (NASDAQ:MRVL) is the custom-silicon and optical-interconnect play, and it just handed investors a discount. The stock traded at $188.88 on July 16, down more than 32% over the past month but still up 111.30% year to date. But Marvell remains down roughly 40% from its 52-week high of $329.80.
Q1 FY2027 revenue was $2.418 billion, up 27.6% year over year, with the data center segment at $1.83 billion, or 76% of revenue. Q2 guidance calls for $2.70 billion in revenue and 93 cents non-GAAP EPS at the midpoint, implying roughly 35% year-over-year growth. CEO Matt Murphy said the company is “seeing exceptional AI-related bookings” and expects revenue growth to accelerate every quarter of fiscal 2027.
The thesis rests on three legs: custom XPUs for hyperscalers (with three-nanometer wafer and advanced packaging capacity secured for the follow-on generation, starting production in calendar 2026), leadership in 1.6T optical interconnect and the newly announced NVLink Fusion partnership with NVIDIA that lets Marvell customers plug into scale-up networks. Analyst sentiment is 86% bullish with a $252.26 target, and the AI model base case implies 20.76% upside to $273.15.
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Risk: forward P/E remains rich at 58x, and revenue concentration in data center leaves the story exposed if a lead hyperscaler dual-sources or brings more work in-house. Quarterly earnings also declined 80.4% year over year on charges tied to the Celestial AI deal.
ON Semiconductor (ON) ON Semiconductor (NASDAQ:ON) is the contrarian pick in the basket. Shares traded around $88.04 on July 16, more than 34% below the 52-week high of $134.92 after a 25.55% one-month pullback. Year to date, the stock is still up 55.27%.
Q1 FY2026 revenue reached $1.513 billion, up 4.7% year over year, beating consensus. Non-GAAP EPS was 64 versus the 62 cents expected. The real story is the AI data center power business, which more than doubled year over year and grew 30%+ sequentially. CEO Hassane El-Khoury put it plainly: “We exceeded expectations as demand strengthened through the quarter and we have moved beyond the cyclical trough on a path to recovery.”
The bull case is inflection-driven. Non-GAAP gross margin has recovered to 38.5% from a 20.3% trough. The company’s EliteSiC silicon carbide franchise, 900V EV architecture wins with Geely and NIO, and a Treo-based Ethernet design at a North American OEM give the story multiple shots on goal. Analyst target price sits at $114.12 with the AI model base case at $123.29, implying 31.18% upside.
Risk: the trailing P/E of roughly 71 reflects earnings that are still depressed, and the Analog & Mixed-Signal segment remains in decline. Quarterly earnings fell 48.7% year over year, and heavy automotive and China exposure keeps the recovery narrative fragile. This is a bet that the AI data center power contribution scales fast enough to outrun the legacy drag.
Each of these names supplies a physical bottleneck for AI compute. Memory bandwidth, optical interconnect, and power delivery all scale with data center CapEx and current supply is tighter than demand. Investors watching July earnings should look for continued margin expansion at Micron, custom-silicon revenue linearity at Marvell, and further AI data center growth at ON. Any one of those data points will move the narrative for the entire subsector.
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Jim Cramer has a message for anyone who bought Micron, Corning, or Seagate with borrowed money: get out now, before the margin clerks make the decision for you.
On Mad Money, the CNBC host laid out why the current unraveling in tech and semiconductor stocks has almost nothing to do with how these companies are actually performing, and everything to do with leverage. “Panic is not a strategy,” he said, before explaining exactly why panic is winning anyway.
Cramer’s Core Argument: Leverage Beats Fundamentals Cramer’s central point is that strong fundamentals cannot save a stock once a leverage-fueled rally goes into reverse. “When you get these parabolic rallies that they’ve had based on overconfidence and leverage on the part of overexuberant traders, well, if you buy a stock thinking that it can fly all the way to the sun, you’re going to get burned no matter how good the fundamentals are, especially if you use margin, something I abhor and will be the bane of your existence if you’re not careful.”
Corning Was Exhibit A Corning (NYSE:GLW | GLW Price Prediction) drew Cramer’s sharpest example. “When you watch Corning go from $77 to $271 in a short period of time, you know that you have to sell some,” Cramer said. “Maybe you have to cut the position in half because the fundamentals are no longer in the driver’s seat. The crazies are.” Our data shows Corning surging more than 200% over the past year, then tumbling nearly 18% in just the past week, exactly the kind of round trip he describes. Corning trades around $158 after that flush.
The Mechanics of a Forced Unwind Once big institutions start selling, there is nobody left with the firepower to hold prices up. “When you get the professionals selling huge chunks of stock, as we have right now, the margin amateurs and the call buyers and inexperienced hedge fund managers cannot possibly prop up the share prices. So what happens? The calls quickly cease to be worth anything. The margin buyers don’t have enough money to fend off the margin calls, so they’re forced to sell at bad prices.” Company quality becomes beside the point. “At this very moment, it doesn’t matter one bit how these companies are actually doing. Do you know that what matters is how the margin clerks are doing? That’s why, by the way, I like to wait until 2 p.m. to see if there’s a real bottom. That’s when the margin clerks are done selling for the day.” In a forced-selling cascade, the bottom arrives when liquidations exhaust themselves, not when earnings stabilize.
Micron: A Blowout Quarter Meets a Margin Flush The companies themselves are fine. Micron Technology (NASDAQ:MU) delivered a fiscal Q3 that raised the bar for the entire memory complex: revenue of $41.46 billion versus $35.25 billion expected, non-GAAP EPS of $25.11, and GAAP gross margin of 84.6%, per the company’s 8-K filing. CEO Sanjay Mehrotra told investors that “Micron’s record fiscal Q3 financial results and even stronger outlook for Q4 reflect the strategic value of memory in the AI era.” Q4 guidance calls for $50.0 billion in revenue and $31.00 in non-GAAP EPS.
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Then the stock rolled over anyway. Micron down 14% on the week even as it sits up nearly 199% on the year. Options positioning tells the same story: tomorrow’s expiration alone carries 337,818 calls of open interest against 577,051 puts, evidence of the leveraged, speculative crowd Cramer is describing.
Seagate Rides the Same Wave Seagate Technology (NASDAQ:STX) sits in the same demand story and the same drawdown. Fiscal Q3 revenue hit $3.11 billion, up 44.1% year over year, with CEO Dave Mosley telling investors that “Seagate is entering a new era of structural growth as AI applications amplify data creation and support sustained storage demand.” The stock still slid 16.25% over the past week.
That gap between fundamentals and price action is exactly what Cramer flagged as healthy. “The faster you get rid of those who borrow the money to buy an SK Hynix or Micron, the healthier this market will be. The unwind is good news.”
The Warning That Gives This Story Its Edge “If you’re borrowing money to buy stocks, I think you’ll still have a chance to get out with your shirt on. But if you persist, you might be naked by Monday.”
Parabolic moves unwind faster than they build, and margin turns a good company into a perilous stock the moment sentiment cracks. Cramer sees Micron and Corning as fundamentally sound businesses. His warning is that borrowed money in a forced-selling market is a trap, and the exit is closing. Sell the leverage, he argues, and once the margin clerks finish their work, the opportunity comes back elsewhere.
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The Nasdaq Composite (^IXIC 1.47%) fell 1.47% to 25,882, the S&P 500 (^GSPC 0.51%) slipped 0.51% to 7,534, and the Dow Jones Industrial Average (^DJI 0.20%) edged 0.20% lower to 52,553 as global technology stocks extended yesterday's sell-off.
Gold prices fell 1.85% to $3,972.75 as of U.S. market close, and the 10-Year Treasury yield inched up 0.01% to 4.56%. Consumer defensive and healthcare stocks led sector gains, while communication services and tech stocks finished as the laggards.
Today's biggest movesThe broad sell-off in memory names continued and Micron Technology plunged almost 6%. Shares of Taiwan Semiconductor Manufacturing Company declined despite record earnings due to concerns about artificial intelligence (AI) spending. Space Exploration Technologies fell below its initial public offering price just weeks after its market debut as geopolitical tensions weighed on high-growth stocks. Abbott Laboratories surged over 10% on strong earnings.
What this means for investorsChip stocks fell today as growing investor AI jitters and escalating violence between the U.S. and Iran further reduced risk appetite. Technology leaders, including Nvidia and Broadcom, dropped as investors rotated into defensive stocks. Investors will be watching upcoming earnings and consumer data for signs of resilience as geopolitical tensions once again take center stage.
With stocks trading close to record highs, bubble concerns are understandable — so much so that a Bank of America fund manager survey released this week showed 45% of respondents thought an AI bubble was the largest tail risk facing markets right now. For long-term investors, the important thing is to look beyond short-term volatility and ensure their portfolios are insulated against a downturn.
Bank of America is an advertising partner of Motley Fool Money. Emma Newbery has positions in Nvidia. The Motley Fool has positions in and recommends Abbott Laboratories, BlackRock, Broadcom, Micron Technology, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
Key Takeaways The 2026 Q2 earnings cycle is in full-swing, with overall expectations remaining bullish. MU and C results were rock-solid, whereas IBM's preliminary results fell flat. MU specifically is a huge contributor to Tech's outsized growth expectations in Q2. The 2026 Q2 earnings season is in full swing now, with many notable companies on the reporting docket in the coming days and weeks. So far, several companies, including Micron (MU - Free Report) and Citigroup (C - Free Report) , have been standouts, whereas preliminary results from IBM (IBM - Free Report) have been disappointing.
IBM Preliminary Results Disappoint IBM, or International Business Machines, shares recently fell on the back of preliminary Q2 results, largely missing the mark on expectations due to weak software results. The company stated that companies swiftly adjusted their CapEx budgets toward servers, storage, and memory infrastructure ahead of expected price increases, with software becoming much less of a priority.
The budget shift caught the company off guard, preventing it from closing large deals within the previously expected timeline. It explains the weaker-than-expected preliminary results and the resulting share plunge.
Shares went from roughly a flat YTD performance to down more than 25%, reflecting just how eager the market has become to punish tech companies that fall short.
Image Source: Zacks Investment Research
Citigroup Posts Broad-Based Strength In contrast, Citigroup actually came out with solid quarterly results yet again, beating the Zacks Consensus EPS estimate by more than 15% while also delivering a solid 4.5% sales surprise. While shares didn’t pop higher, that’s largely a reflection of management staying somewhat conservative in their view, with Citigroup shares already up 13% YTD and outperforming the S&P 500.
The bank posted rock-solid growth, with revenue of $24.8 billion reflecting 14% YoY growth alongside a 45% YoY improvement in earnings. It saw broad-based strength from a segment standpoint, with four out of five seeing double-digit percentage revenue growth. It also raised its quarterly dividend payout by 12% and launched its $30 billion buyback program, further reflecting just how successful the quarter was.
The EPS outlook for the financial titan remains bullish, with EPS expectations increasing across the board.
Image Source: Zacks Investment Research
Micron Crushes AgainWe’ve all become accustomed to Micron’s legendary performance, with demand for memory solutions amid the AI frenzy driving unprecedented growth and demand for the company for some time now. Micron again crushed it in its latest release, which we count as part of the Q2 cycle, beating our consensus EPS estimate by 17% and delivering a 13% sales surprise.
Sales of $41.5 billion were up by a triple-digit 350% YoY, and earnings grew by an even more impressive, quad-digit 1340%. The company is actually a major contributor to Tech’s outsized growth expectations for the Q2 cycle, with EPS revisions remaining highly bullish across the board.
The stock remains a Zacks Rank #1 (Strong Buy).
Image Source: Zacks Investment Research
Bottom Line
The 2026 Q2 earnings season is in full swing, with several notable companies already delivering results. So far, Micron (MU - Free Report) and Citigroup (C - Free Report) have been big-time standouts, whereas preliminary results from IBM (IBM - Free Report) have been a big disappointment.
Negativní sentiment se před koncem obchodní seance ještě více prohloubil. Může za to silný pokles technologického giganta Google, u kterého přišla zpráva, že je v několikaměsíčním zpoždění s vydáním nové vlajkové AI verze Geminy Pro 3.5. V prostředí velké konkurence to může mít neblahý efekt ztráty poptávky. Akcie Alphabet končí silnou ztrátou –4,43 %.
Nevalný výsledek zažil i čipový sektor, kde velkou váhu poklesu má na svědomí Micron -5,65 % či AMD -5,33 %.
Oproti tomu se dařilo defenzivním sektorům spotřebního zboží či služeb. McDonald přidal slušných +3,04 %, PepsiCo též +2,97 % a například kartová asociace Mastercard +3,04 %.
Ropa WTI stále mírně ztrácela -0,75 %. Negativní vývoj na burze tedy dnes nebyl ovlivněn negativní geopolitickou situací.
Index Dow Jones -0,2 % na 52553,62 b.
S&P 500 -0,51 % na 7533,89 b.
Nasdaq Composite -1,47 % na 25881,95 b.
Index S&P 500 -0,51 % na 7533,89 b. Nejsilnější sektory S&P Změna Nejslabší sektory S&P Změna Nezbytná spotřeba +2,9 % Komunikační služby -2,8 % Zdravotní péče +2,2 % Informační technologie -1,8 % Reality +2,1 % Zbytná spotřeba -0,3 % Nejsilnější akcie S&P Změna Nejslabší akcie S&P Změna Abbott Laboratories (ABT) +11 % Sandisk Corp (SNDK) -13 % JB Hunt Transport Services (JBHT) +8,0 % Seagate Technology Holdings (STX) -10,0 % Fedex Freight Holding (FDXF) +7,5 % Corning (GLW) -9,2 % Erie Indemnity (ERIE) +7,5 % Western Digital Corp (WDC) -9,2 % Dexcom (DXCM) +7,2 % Marvell Technology (MRVL) -8,7 %
Jan Pazourek, Fio banka, a.s.
Americkým indexům se dnes nedaří. Po počáteční kladném otevření se v průběhu dne pomalu ale jistě sunou do záporných hodnot, momentálně s výjimkou Dow Jones, který je na kladné nule. Technologický sektor je i nadále tlačen vahou čipového sektoru, který nadále koriguje letošní růstovou rallye. V Americké společnosti se začíná objevovat napětí kolem sektoru umělé inteligence, přičemž se začíná mluvit o její regulaci. V obci v Michiganu se lidé postavili proti výstavbě datového centra za 16 mld. USD, který má být velkým společným projektem firem Oracle, Open AI, Related Digital, Blackstone a Walbridge. Investoři jsou tedy stále opatrní, co se týče budoucnosti tohoto sektoru.
Nejlépe se daří klasickým technologickým společnostem těžící z poskytování výpočetního výkonu, takzvaný hyperscaleři. Microsoft přidává +1,88 %. V čele poklesu v čipovém sektoru je opět Micron, který odepisuje -6,11 %. Podobně je na tom ARM -8,41 %.
Oproti nim se kapitál opět přelévá do defenzivních titulů. Zde excelují například McDonald +2,6 % či MasterCard +2,4 %. Daří se i realitnímu sektoru, kterému pomáhá vidina nadále se nezvyšujících úrokových sazeb. Lídr na tomto trhu Realty Income přidává slušné 3 %. Vici Properties pak +2,57 %. Opačný efekt to má na cenné kovy, kde zlato odepisuje -1,38 % a bojuje o udržení supportní úrovně 4000 USD.
Geopolitický vývoj v Hormuzském průlivu mírně ustrnul, nelepší se ale ani nehorší. Ropa WTI osciluje kolem nuly a nyní odepisuje -0,67 %.
Index Dow Jones +0,1 % na 52711,63 b.
S&P 500 -0,24 % na 7554,53 b.
Nasdaq Composite -0,84 % na 26048,65 b.
Index S&P 500 -0,24 % na 7554,53 b. Nejsilnější sektory S&P Změna Nejslabší sektory S&P Změna Nezbytná spotřeba +2,3 % Informační technologie -1,7 % Zdravotní péče +2 % Průmysl -0,2 % Reality +1,5 % Utility -0,2 % Nejsilnější akcie S&P Změna Nejslabší akcie S&P Změna Abbott Laboratories (ABT) +11 % Corning (GLW) -10 % Erie Indemnity (ERIE) +9,5 % Sandisk Corp (SNDK) -10 % Cintas Corp (CTAS) +7,1 % Western Digital Corp (WDC) -9,9 % Ingersoll Rand (IR) +6,9 % Seagate Technology Holdings (STX) -8,6 % JB Hunt Transport Services (JBHT) +6,6 % Marvell Technology (MRVL) -8,4 %
Jan Pazourek, Fio banka, a.s.
Micron stock has plunged since reaching a record high of $1,255 on June 25. Shares have fallen about 30%, mirroring the sharp declines seen across the memory chip sector, including industry leaders Samsung and SK Hynix.
Key Takeaways Sandisk is expanding AI storage with enterprise SSDs, multiyear supply deals and stronger demand visibility.MU is benefiting from AI demand across DRAM, HBM and NAND, backed by Strategic Customer Agreements.SNDK trades at 8.31X forward earnings versus MU's 6.34X, giving MU a valuation edge. Sandisk Corporation (SNDK - Free Report) and Micron Technology (MU - Free Report) are prominent names in the memory semiconductor space. They supply the NAND flash and DRAM technologies that power servers, storage systems and enterprise infrastructure. Demand for this technology has grown sharply as AI workloads scale across data centers.
Rising inference activity, larger models and expanding storage needs continue to drive memory consumption higher. This demand backdrop has lifted the entire memory sector this year. SNDK and MU have each been direct beneficiaries of this shift.
As infrastructure spending continues to expand, more capital is expected to flow towards memory-intensive workloads. This trend is expected to shape performance for SNDK and MU in the coming quarters. Let us delve deep to determine which stock is a better buy.
The Case for SNDKSandisk has built its business around NAND flash memory, a technology that is becoming increasingly important as AI workloads require larger, faster storage to support inference, retrieval-augmented generation (RAG) and expanding context windows. Its enterprise SSD portfolio, powered by BiCS8 technology, has strengthened the company's position in AI data centers, where demand for high-capacity, low-latency storage continues to increase. As enterprises scale AI deployments, enterprise SSD adoption is expected to remain a key long-term growth driver.
Beyond product innovation, Sandisk has been reshaping its business model to reduce the cyclicality associated with the NAND market. Its New Business Model framework, based on multi-year supply agreements backed by financial commitments, has improved demand visibility while providing customers with long-term supply assurance. The company has also strengthened its supply chain through the extension of its Kioxia joint venture and investment in long-term DRAM supply through Nanya, enhancing manufacturing flexibility and supporting future growth.
These initiatives have already begun translating into stronger operating performance. In the third quarter of fiscal 2026, data center revenues increased 233% sequentially to $1.47 billion, while non-GAAP gross margin expanded to 78.4% from 51.1% in the previous quarter. The Zacks Consensus Estimate for fiscal 2026 revenues is pegged at $19.59 billion, suggesting 166.4% year-over-year growth, while the consensus mark for EPS is pegged at $66.54 compared with $2.99 in fiscal 2025, revised up by 1.31% over the past 30 days, reflecting improving profitability as AI-driven enterprise storage demand continues to accelerate.
The Case for MUMicron has strengthened its position in the AI memory market through its diversified portfolio spanning DRAM, high-bandwidth memory (HBM) and NAND solutions. As AI models become larger and inference workloads more memory intensive, demand is expected to remain strong for both high-performance DRAM and enterprise SSDs. This broad product portfolio enables Micron to participate across AI training, inference and data storage, providing exposure to multiple growth drivers within the AI infrastructure ecosystem.
The company has further enhanced its long-term growth prospects through Strategic Customer Agreements (SCAs), which secure multi-year demand commitments and improve supply visibility. These agreements support better capacity planning while reducing earnings volatility associated with the memory industry's traditional pricing cycles. At the same time, Micron continues to benefit from favorable industry fundamentals, with demand for both DRAM and NAND remaining above available supply as hyperscalers and enterprises expand AI infrastructure investments.
The company's strong execution has been reflected in its financial performance. Third-quarter fiscal 2026 revenues surged 346% year over year to $41.46 billion. The Zacks Consensus Estimate for fiscal 2026 revenues is pegged at $126.66 billion, implying growth of 238.87%, while the consensus mark for EPS is pegged at $73.86 compared with $2.99 in fiscal 2025, revised up by 22.63% over the past 30 days, reflecting continued confidence in Micron's AI-driven growth trajectory.
SNDK vs. MU: Price Performance and ValuationYear to date (YTD), shares of MU have jumped 216.9%, trailing SNDK's 579.8% return. Both stocks have benefited from strong AI-driven memory demand, with Sandisk's gain led by tight NAND supply and a string of new multiyear pricing agreements and Micron's supported by its broader DRAM, NAND and HBM portfolio alongside its own set of Strategic Customer Agreements.
SNDK vs. MU: YTD Performance
Image Source: Zacks Investment Research
SNDK currently trades at a forward 12-month price-to-earnings (P/E) multiple of 8.31X, well above MU's 6.34X. Sandisk's premium to Micron appears difficult to justify given Micron's broader exposure across DRAM, NAND and HBM and the scale of demand already locked in through its Strategic Customer Agreements.
SNDK vs. MU: Forward 12-Month P/E Valuation
Image Source: Zacks Investment Research
ConclusionBoth Micron and Sandisk are well-positioned to capitalize on the broader AI infrastructure buildout. While Sandisk continues to deliver explosive growth tied to tight NAND pricing and multiyear supply agreements, Micron has significantly strengthened its position through its diversified DRAM, NAND and HBM portfolio and a growing base of Strategic Customer Agreements spanning hyperscalers and enterprise customers. Given its broader revenue base, lower valuation and stronger earnings estimate revision, MU appears to offer a more compelling investment opportunity than SNDK.
MU and SNDK sport a Zacks Rank #1 (strong buy) each at present. You can see the complete list of today's Zacks #1 Rank stocks here.
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Artificial intelligence remains the biggest force driving the stock market in 2026. The world’s largest technology companies are on pace to spend more than $700 billion this year building AI infrastructure, according to company guidance and earnings releases. New data centers continue breaking ground, Nvidia (NASDAQ:NVDA | NVDA Price Prediction) can’t build enough cutting-edge GPUs to satisfy demand, and cloud providers are racing to expand capacity.
Yet one corner of the AI supply chain is telling a very different story. Memory stocks have stumbled despite AI demand showing few signs of slowing. That disconnect looks puzzling on the surface, but the numbers suggest the market is already looking beyond today’s boom and pricing in tomorrow’s risks.
Memory Stocks Are Falling for Different Reasons Here’s what recent performance looks like:
Those declines aren’t being driven by collapsing AI demand. Quite the opposite. Micron’s latest earnings release showed record revenue, while management said high-bandwidth memory (HBM) remains sold out well into future production. SK hynix has likewise reported strong HBM demand fueled by Nvidia’s latest AI accelerators.
Here is what Wall Street is really worried about. Memory has always been a cyclical business. Unlike software, where each additional sale carries high margins, DRAM and NAND chips behave much more like commodities. Prices rise when supply is tight, then fall once manufacturers expand production.
That’s exactly where investors think this cycle is heading.
Each major manufacturer is ramping HBM production through new fabrication capacity and better manufacturing yields. More supply is good news for customers, but it isn’t always good news for shareholders.
A memory company can sell 30% more chips and still earn less money if average selling prices decline 20%. Historically, pricing has mattered more than shipment volume. Ironically, AI demand can remain healthy while memory profits begin shrinking.
AI Spending Is Also Changing Another reason investors have become cautious is that AI spending itself is evolving.
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During the first wave of generative AI, spending centered on GPUs and HBM memory because those were the biggest bottlenecks. Today, hyperscalers are directing more capital toward:
Power infrastructure Data center construction Liquid cooling Optical networking Custom AI chips Memory remains indispensable, but it represents a smaller share of incremental AI investment than it did two years ago.
Granted, the bullish case hasn’t disappeared. Every new AI server still requires far more HBM than traditional enterprise servers, and larger AI models continue increasing memory requirements. Company earnings releases from Micron and SK hynix indicate much of their premium HBM production is already committed to customers.
The debate is no longer about whether AI demand exists. It’s about whether supply growth eventually catches up.
Key Takeaway In short, the recent sell-off says more about expectations than it does about AI itself.
Wall Street isn’t betting that the AI boom is ending. It’s betting that memory pricing may have already peaked. If HBM and DRAM prices remain firm while hyperscalers continue investing hundreds of billions of dollars, today’s weakness could prove to be an attractive buying opportunity. Conversely, if new capacity pushes prices lower, memory stocks may struggle even while Nvidia and the broader AI ecosystem continue growing.
Ultimately, smart investors shouldn’t judge memory companies by AI headlines alone. The numbers that matter most are memory pricing, production capacity, and inventory levels. In this industry, those figures usually determine where the stocks go next.
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Memory chip demand has surged remarkably as technology companies have ramped up their data center infrastructure spending in recent years. Micron Technology (MU 5.73%) has benefited immensely from this boom, and with the memory market forecast to reach more than $1 trillion in 2027 -- up from over $800 billion this year -- the growth phase of this cycle isn't done just yet.
Here's how the company is benefiting, and why buying some Micron stock and holding it for the long term is likely to prove a good choice.
Image source: Micron Technology.
Micron's management believes memory demand has a long runway for growth In the past, the memory chip market has been highly cyclical. As new markets for memory open, demand initially surges, and prices rise. In response, the handful of suppliers in the market move to expand their production capacity so they can benefit. But eventually, supply outstrips demand (which may also wane organically), and prices tumble again. The result: significant boom-and-bust cycles.
Some people have worried that this soaring memory market is just another up phase in another normal cycle. Still, the latest research from McKinsey shows that the overall AI semiconductor market is booming, and forecasts that it will reach between $1.5 trillion and $1.8 trillion by 2030, with memory processors accounting for nearly 30% of the total market.
And Micron's management is bullish on the company's long-term prospects in this market, too.
"The memory industry has been structurally transformed by the proliferation of AI," said CEO Sanjay Mehrotra on the fiscal Q3 2026 earnings call. "We are only in the early innings of the significant innovation and productivity that can be unleashed in every part of the global economy over time."
The back-and-forth debate right now around AI is about when the spending spree on artificial intelligence infrastructure will slow down, but what's interesting about Mehrotra's comments is his focus on the premise that it's not just data centers that will need lots of memory.
"Exciting possibilities enabled by robotics and humanoids, as well as fully autonomous vehicles, portend a robust long-term demand environment for memory and storage," he noted.
In short, his views on the outlook for memory demand are based on the idea that the nascent robotics and self-driving vehicle markets are headed for rapid expansion. These new technologies will likely need a lot of memory to support their advanced AI systems and make complex real-time decisions.
Morgan Stanley estimates there will be 1 billion humanoid robots globally by 2050, with a potential market size of $5 trillion. With that opportunity ahead of it, Micron's management is likely right to be bullish on its long-term prospects.
Micron Technology
Today's Change
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-5.73
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-51.81
Current Price
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852.47
Micron is already benefiting immensely from memory demand Micron's shares have risen 687% over the past year as the company has successfully tapped into rising memory demand.
Sales surged 45% in the fiscal third quarter to nearly $41.5 billion, and its non-GAAP (adjusted) earnings jumped more than 1,300% year over year to $24.67 per share.
If this phase of growth in memory demand is truly just getting started, there's still plenty of time for investors to benefit from Micron's opportunity. And you don't even have to pay a premium to own it. Micron's stock trades at a price-to-earnings (P/E) ratio of just 23, which makes it a relative bargain compared to the average P/E ratio of 37 for the tech sector.
All of which means now may be a great time to buy shares of this memory stock.
Technologické akcie mají za sebou mimořádně silné období, ale podle analytika Patria Finance Branislava Sotáka nejdůležitější investiční příběh posledních let ještě zdaleka nekončí. Přestože se část investorů obává, že už jsme u vrcholu AI boomu, růst rekordních kapitálových výdajů technologických gigantů zatím žádné zásadní ochlazení nenaznačuje. V podcastu Analytický radar vysvětluje, proč dál věří Nvidii, kde vidí nové příležitosti v polovodičovém řetězci a proč začíná být zajímavý i dlouho přehlížený softwarový sektor.
00:32 Cyklické paměťové čipy
08:48 Nvidia zpět v Investičních tipech
16:21 Advanced Packaging jako nové úzké hrdlo
18:43 ASML a podpora ze strany Intelu
21:28 Investiční AI cyklus a inflace
29:33 Návratnost AI investic
34:35 Boj o kapitál
40:35 Software jako nový hedge?
AI cyklus nekončí, ani nevykazuje známky únavy
Investiční svět se v posledních dvou letech točí kolem umělé inteligence. Zatímco mnozí investoři se už začínají bát vyčerpání růstového příběhu, Branislav Soták podobné obavy zatím nesdílí. „AI investiční cyklus zatím nekončí, nevykazuje žádné známky zpomalení,“ říká otevřeně.
Investice do AI infrastruktury se postupně staly jedním z hlavních motorů americké ekonomiky. „Odhaduje se, že až šest nebo sedm procent amerického HDP letos tvoří investice do AI infrastruktury.“ AI je tak bez nadsázky alfa a omega současného trhu. „Ať se podíváme na výkonnost indexů, nebo na růst zisků firem, všude najdeme AI.“
Paměťové čipy zažívají bezprecedentní boom
Jedním z největších vítězů současného cyklu jsou výrobci paměťových čipů. Trojice Micron, Samsung a SK Hynix těží z extrémního nedostatku výrobních kapacit a tlačí ceny prudce vzhůru. „Tato situace je bezprecedentní. Nic podobného jsme v minulosti neviděli a zatím nic nenasvědčuje tomu, že by měla v dohledné době skončit,“ říká Soták.
Přesto upozorňuje, že právě tento segment zůstává dlouhodobě cyklický. Investoři by proto neměli podlehnout dojmu, že současný boom potrvá věčně. „Paměťový segment byl vždy cyklický a podle mého názoru si tuto povahu zachová i do budoucna.“ První skutečný test současné cenové síly podle něj přijde ve druhé polovině příštího roku, kdy začne Micron zprovozňovat nové výrobní kapacity v americkém Idahu.
Nvidia už není jen výrobce čipů
Jednou z nejzajímavějších změn posledních měsíců bylo opětovné zařazení Nvidie mezi investiční tipy Patria Finance. Důvodů je podle Sotáka hned několik. „Pokud člověk věří, že investiční cyklus do AI nekončí, pak je Nvidia paradoxně velmi levná expozice na tento trend.“
Přestože akcie Nvidie za poslední roky vzrostly o tisíce procent, ocenění firmy není podle něj přehnané. „Valuace Nvidie dnes není vyšší než před pěti lety. Akcie jsou mnohonásobně výše, ale firma je úplně jiná.“
Klíčové navíc je, že Nvidia už dávno není pouze výrobcem grafických procesorů. S novou generací Vera Rubin rozšiřuje své působení směrem k procesorům CPU, síťové infrastruktuře, optickým propojením i softwarové platformě CUDA. Právě tato diverzifikace podle Sotáka výrazně zvyšuje odolnost byznysu. „Je to celý technologický stack, který zákazník kupuje.“
Nové úzké hrdlo?
Zatímco investoři se dlouhé měsíce soustředili na nedostatek výpočetních čipů a pamětí, Soták upozorňuje na další potenciálně kritické místo celého řetězce. Takzvaný advanced packaging. Jde o závěrečnou fázi výroby čipů, kdy se jednotlivé komponenty skládají do jednoho funkčního systému.
„Advanced packaging je úzkým hrdlem polovodičového řetězce už poměrně dlouho a zatím nic nenasvědčuje tomu, že by se to mělo změnit.“
Z tohoto trendu podle něj mohou těžit nejen společnosti typu Taiwan Semiconductor Manufacturing (TSMC), ale také výrobci specializovaných zařízení jako ASML, Applied Materials nebo BE Semiconductor.
ASML zůstává evropskou jedničkou
Právě ASML patří mezi firmy, které Soták považuje za dlouhodobě mimořádně atraktivní v Evropě. Nizozemská společnost je prakticky monopolním dodavatelem strojů pro výrobu nejpokročilejších čipů na světě. „ASML je podle mě jedna z nejlepších evropských akcií pro dlouhodobé držení.“
Investory u ní sice v posledních měsících znepokojily informace o odkladu nasazení nejmodernější generace výrobních strojů ze strany TSMC. Soták však upozorňuje, že prostor rychle zaplnil Intel. „Vypadá to, že hozenou rukavici zvedl Intel, který už nejmodernější stroje ASML nasadil do výroby.“
Inflace největším krátkodobým rizikem
Ačkoli se většina technologických investorů soustředí na AI, Soták upozorňuje, že trhy stále velmi citlivě reagují na vývoj inflace. „Nejhorší dny pro technologický sektor v prvním pololetí přišly ve chvílích, kdy se připomněla inflační hrozba.“
Vyšší inflace totiž tlačí vzhůru dlouhé výnosy dluhopisů, což následně zvyšuje diskontní sazby používané při oceňování akcií. A nejcitlivější jsou právě růstové technologické firmy. „Rychle rostoucí společnosti mají větší část očekávaných cash flow v budoucnosti, a proto na růst sazeb doplácejí nejvíce.“
Podle Sotáka však ani případné vyšší náklady financování nemusí zásadně ohrozit AI investice. „O investicích nebude rozhodovat jejich cena, ale návratnost a konečná poptávka. A tam zatím žádné problémy nevidíme.“
IPO OpenAI a Anthropic? Krátkodobé zemětřesení, nikoliv konec příběhu
Velkým tématem příštích měsíců budou také očekávané veřejné nabídky akcií firem OpenAI a Anthropic. Podle Sotáka může jít krátkodobě o významný faktor pro trh. „Pravděpodobně půjde hlavně o problém absorbovat nové množství kapitálu, které na trh přijde.“
Naopak z dlouhodobého pohledu zůstává hlavní otázka stále stejná. „Nejdůležitější je, kde jsme v rámci AI cyklu a jestli bude pokračovat. A zatím nevidíme žádné známky, že by se měl zlomit.“
Právě tato jednoduchá teze podle Branislava Sotáka vysvětluje nejen vývoj technologických akcií, ale i většiny globálních finančních trhů. Dokud totiž nepřijde důkaz, že poptávka po AI infrastruktuře slábne, zůstává umělá inteligence dominantním investičním příběhem současnosti.
Přehlížená příležitost roku?
Zatímco výrobci čipů a infrastruktury kralují trhu, softwarový sektor letos výrazně zaostal. Právě to však podle Sotáka vytváří příležitost. „Brutální propad softwarových akcií byl podle mě překvapivý i pro celý trh.“
Firmy jako ServiceNow, Salesforce nebo FactSet nyní podle něj paradoxně nabízejí kombinaci nižšího ocenění a vysoké schopnosti generovat hotovost. „Free cash flow yield je u řady těchto společností dvojciferný. Připomíná to velké technologické firmy před nástupem AI investiční horečky.“
Zajímavé je podle něj i chování těchto titulů během tržních výkyvů. Když investoři zpochybní tempo AI investic, výrobci čipů obvykle prudce klesají. Softwarové společnosti naopak mnohdy rostou. „Software se poslední dobou chová trochu jako hedge vůči hardwaru.“
Memory has emerged as one of the biggest bottlenecks in artificial intelligence (AI) data centers, which explains why the demand for these chips has simply taken off in recent years.
In fact, memory demand is so strong that the ongoing supply shortage in this industry is anticipated to last beyond 2030. Not surprisingly, investors have been buying memory stocks, such as Micron Technology (MU 3.88%) and Sandisk, hand over fist over the past year. However, there is a new addition to this list following the U.S. listing of South Korean memory giant SK Hynix (SKHY 7.84%).
This Micron competitor could become one of the biggest winners of the AI-fueled memory boom. Importantly, U.S. investors can now easily invest in this semiconductor stock by buying its Nasdaq-listed American Depository Receipts (ADRs). Let's see why doing so could turn out to be a smart move.
Image source: Getty Images.
SK Hynix is bigger than Micron Micron has been one of the most sought-after memory manufacturers for investors, primarily due to its red-hot revenue and earnings growth. This explains why Micron stock has jumped by a stunning 689% over the past year. SK Hynix, however, has also witnessed a phenomenal 606% rise on the Korean stock market over the past year.
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That's not surprising, as it is one of the biggest players in the memory chip market. SK Hynix has been benefiting from rapidly rising prices and a growing appetite for dynamic random-access memory (DRAM) and NAND flash chips. Its operating profit rose by 5x year over year in the first quarter of 2026, while revenue nearly tripled. The company's operating margin also reached a record 72% during the quarter.
Micron's non-GAAP operating margin, meanwhile, landed at 81.2% in the most recent quarter. However, SK Hynix seems well-positioned to bridge the margin gap with Micron owing to its higher market share. According to Counterpoint Research, SK Hynix's DRAM market share was 29% in the first quarter of 2026, seven points higher than Micron's share. The Korean behemoth enjoyed a much larger share of 58% in high-bandwidth memory (HBM), well above Micron's 21%.
Investors should note that HBM demand has been growing exponentially, as this type of memory helps transport massive data sets in AI chip clusters and data centers in an energy-efficient manner. HBM plays a critical role in ensuring that AI accelerator chips don't waste time and energy waiting for data. So, it is easy to see why HBM demand is so strong that the price of these chips is poised to double in 2027, according to DigiTimes.
SK Hynix's position as the leading HBM vendor suggests that its terrific revenue and earnings growth are poised to continue. What's more, SK Hynix holds an 18% market share in NAND flash storage chips, above Micron's 13%. This is another terrific reason to buy SK Hynix stock. After all, NAND flash prices are projected to jump by a whopping 234% in 2026, according to Gartner.
SK Hynix CEO Kwak Noh-Jung recently noted that the memory shortage could worsen in 2027, suggesting prices could continue to rise. He also noted that robust customer demand for memory chips and capacity constraints will ensure that demand for memory continues to outstrip supply beyond 2030.
All this suggests that buying this AI stock could be one of the smartest moves you can make right now, especially considering that SK Hynix is extremely undervalued right now.
This memory stock is about to go parabolic We have already seen that SK Hynix stock has soared impressively over the past year. However, it isn't done soaring yet. Analysts are anticipating a 429% increase in its earnings per share (EPS) in 2026 to 319,109.97 South Korean won, according to Yahoo! Finance consensus estimates, which translates into $214.21 per share at the current exchange rate. However, as each ADR of SK Hynix represents a tenth of its common share, the EPS per ADR would be around $21.42 based on the converted amount.
SK Hynix is trading at 22.3 times trailing earnings, a discount to the tech-focused Nasdaq-100 index's average earnings multiple of 34.5. Assuming it trades at a discounted 20 times earnings at the end of 2026 and its EPS per ADR lands at $21.42, its stock price could reach $428 over the next few months.
That's just over 2x SK Hynix's current stock price, indicating that investors can buy this potential multibagger at an attractive valuation right now.
Large language model (LLM) training was the first big phase of artificial intelligence (AI), but the inference market promises to eventually become the larger market. While AI model training is compute-heavy, inference tends to be much more reliant on fast access to memory.
That is one of the reasons why demand for high-bandwidth memory (HBM), a special form of DRAM (dynamic random access memory) packaged with graphics processing units (GPUs) and other AI chips to optimize performance, has been skyrocketing. It is also one of the reasons why Micron Technology (MU 3.88%) stock has the potential to double from here.
Image source: The Motley Fool.
A cheap stock with big potential Trading at a forward price-to-earnings (P/E) ratio of just 6.5 times fiscal 2027 analyst estimates, Micron's stock is far from expensive and has plenty of room to run if the current memory supercycle lasts longer than investors think. That is just what rival SK Hynix predicted, with its CEO saying that 2027 will be the most supply-constrained year the industry has ever seen and that supply will not be able to catch up with demand until 2030 or beyond.
That type of dynamic is not currently priced into the market, and high DRAM prices could be here to stay. The reason for this is quite simple. Demand for HBM is skyrocketing, in large part due to inference, and hyperscalers (owners of large data centers) have shown no signs of slowing their spending on AI infrastructure.
Meanwhile, both HBM and advanced logic chips, like GPUs, need more extreme ultraviolet lithography (EUV) machines to increase capacity. There is only one company in the world that makes these systems, ASML, and it can only produce so many per year.
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In addition, HBM can require three times or more wafer capacity than ordinary DRAM. This means that even as DRAM wafer capacity increases, overall supply still isn't keeping pace. So while the big three DRAM makers are all working to increase capacity, there are built-in constraints that limit their ability to add a large amount of capacity quickly. This should keep DRAM prices high, and DigiTimes has reported that HBM prices could more than double next year.
If DRAM prices remain elevated into 2030 and beyond, it would be easy to see Micron's stock potentially doubling from here. It has entered into long-term supply agreements for the first time, and these agreements now cover 40% of its revenue. That visibility, along with an extended memory supercycle, should see both earnings continue to rise and its multiple expand. That makes it a top AI stock to consider.
BOISE, Idaho, July 16, 2026 (GLOBE NEWSWIRE) -- Micron Technology, Inc. (Nasdaq: MU) has completed Strategic Customer Agreements (SCAs) with key Tier 1 suppliers and ecosystem partners supporting the global automotive industry and automotive manufacturers.
Automotive platforms require consistent, high-quality component supply over extended lifecycles, making continuity and reliability of memory and storage a crucial priority for vehicle production and delivery at scale. Together, the companies – Qualcomm, Visteon, HARMAN, JOYNEXT, DENSO, Astemo and Hyundai Mobis – represent critical suppliers of the technologies that support the automotive ecosystem.
With more than 30 years of leadership in the automotive industry, Micron appreciates the importance of these partnerships. Automotive OEMs rely on memory and storage solutions to support next-generation in-vehicle infotainment, advanced driver assistance and connectivity systems, as well as increasing levels of intelligence in the vehicle. Consumers recognize the value of intelligent in-cabin experiences and higher levels of autonomous safety features enabled by advanced driver assistance systems. These agreements are designed to support long-term access to advanced memory and storage solutions as the automotive industry shifts toward increasingly sophisticated AI-enabled vehicles.
The SCAs provide Micron, as well as these valued partners, with greater visibility for optimized production planning as well as increased collaboration on future memory and storage requirements. By establishing greater certainty around supply and pricing, the agreements support investments in the technology development, qualification and manufacturing capacity required for future vehicle platforms.
Increased visibility and strategic planning are critical for this segment, balancing traditionally longer product lifecycles and rigorous qualification standards with a faster adoption of advanced technology.
“The next phase of automotive innovation will depend on the strength of the ecosystem behind it,” said Sanjay Mehrotra, chairman, president and CEO of Micron Technology. “As vehicles become increasingly intelligent, memory and storage are critical enablers of technology experiences that consumers demand. These SCAs with leading automotive technology partners will help ensure that advanced vehicle platforms have the memory and storage capabilities required to deliver richer, safer and more intelligent experiences.”
“As vehicles become increasingly software-defined, automakers need technology platforms that bring together high-performance compute, connectivity, memory and storage,” said Cristiano Amon, President and CEO, Qualcomm Incorporated. “We work closely with automakers and Tier 1 suppliers to deliver advanced digital cockpit, driver assistance and connectivity solutions designed to support new capabilities over long vehicle lifecycles. Working with Micron helps us give customers the strong technology foundation they need as vehicles become more intelligent and connected.”
“Consumers increasingly expect their vehicles to deliver the intuitive, personalized and connected experiences that match the rest of their digital lives,” said Christian Sobottka, Chief Executive Officer and President, Automotive Division, HARMAN. “Delivering on those expectations at automotive scale requires close collaboration across the technology ecosystem. By working with key technology partners like Micron, we are helping strengthen the resilient memory and storage foundation needed to reliably deliver increasingly intelligent, software-defined vehicle platforms. This helps give automakers greater confidence as we bring differentiated, road-ready in-cabin experiences to market.”
“Automakers are accelerating the development of intelligent vehicle platforms that rely on advanced driver assistance capabilities to enhance safety and driver confidence,” said Lee Gyu-suk, President and CEO of Hyundai Mobis. “Supporting these platforms requires long-term technology planning and a resilient supply ecosystem. Through our relationship with Micron, we are helping build the foundation needed for future ADAS and software-defined vehicle architectures.”
“Advanced digital cockpit experiences depend on high-performance memory and storage,” said Sachin Lawande, President and Chief Executive Officer of Visteon. “Our collaboration with Micron helps support the next generation of connected in-vehicle experiences.”
“To realize a safer and more secure mobility society, the automotive industry must continue advancing the intelligence and capabilities of the systems that support drivers in navigating the road safely,” said Shinnosuke Hayashi, President and CEO of DENSO Corporation. “Partnerships across the automotive ecosystem play an important role in ensuring those technologies can scale to meet the industry's evolving needs.”
Underpinned by Micron's continued global investment in automotive memory and storage technology, manufacturing scale and customer engagement, Strategic Customer Agreements help strengthen relationships across the automotive ecosystem while providing greater visibility into future technology and supply requirements.
These agreements are among the SCAs discussed on Micron’s fiscal third-quarter 2026 financial conference call.
About Micron Technology, Inc.
Micron Technology, Inc. is an industry leader in innovative memory and storage solutions, accelerating intelligence to enrich life for all. With a relentless focus on our customers, technology leadership and manufacturing and operational excellence, Micron delivers a rich portfolio of high-performance DRAM, NAND and NOR memory and storage products. Every day, the innovations that our people create fuel the data economy, enabling advances in artificial intelligence (AI) and compute-intensive applications that unleash opportunities — from the data center to the intelligent edge and across the client and mobile user experience. To learn more about Micron Technology, Inc. (Nasdaq: MU), visit micron.com.
Forward-Looking Statements
This press release contains forward-looking statements, including statements regarding the anticipated benefits of the collaboration. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially. Please refer to the documents Micron files with the Securities and Exchange Commission, specifically its most recent Form 10-K and Form 10-Q. These documents contain and identify important factors that could cause actual results to differ materially from those contained in these forward-looking statements. These certain factors can be found at https://investors.micron.com/risk-factor. Although Micron believes that the expectations reflected in the forward-looking statements are reasonable, Micron cannot guarantee future results, levels of activity, or achievements. Micron is under no duty to update any of the forward-looking statements after the date of this press release to conform these statements to actual results.
Micron Technology on Thursday signed long-term agreements with automotive suppliers, including chip designer Qualcomm and audio products maker Harman, to secure memory and storage components that powers AI-enabled vehicles.
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At $905, Micron Technology (NASDAQ:MU | MU Price Prediction) shows growing valuation risk. The memory maker has been the single most spectacular AI-adjacent trade of the past year, and that is exactly the problem at today’s quote.
Micron is the only U.S.-based maker of DRAM and NAND memory, and it now sells high-bandwidth memory (HBM) next to every leading-edge AI accelerator. Cloud Memory did $13.769 billion in Q3, Core Data Center added $11.524 billion, and Mobile and Client matched at $11.521 billion. Reported gross margin hit 84.6%, up from 37.7% a year earlier.
The stock has risen from roughly $119.92 a year ago to $904.28, and has pulled back 16.87% in the past month from above $1,087. The question now is whether that pullback is a pause or the start of something bigger.
Why the Bulls Still Own This Trade Q3 revenue landed at $41.456 billion, beating consensus by 17.60%, and non-GAAP EPS of $25.11 beat by 23.79%. Q4 guidance calls for $50 billion in revenue and $31 in EPS at the midpoint, with gross margin near 86%.
Management has signed 16 Strategic Customer Agreements carrying roughly $100 billion in floor-priced revenue over five years, backed by $22 billion in customer cash deposits and letters of credit. CEO Sanjay Mehrotra says HBM4 12-high is ramping twice as fast as HBM3E, and Wall Street’s consensus target of $1,486 implies substantial upside.
Why $905 Is the Wrong Price Three risks weigh on that story at $905.
HBM execution: HBM4 is generating over $1 billion in quarterly revenue with a single lead customer, and HBM4E volume production is not slated until calendar 2027. Any yield stumble, qualification delay, or lost socket resets the entire margin narrative.
Memory cyclicality: DRAM prices rose in the low-60% range and NAND in the mid-80% range sequentially in Q3. Double-ordering likely inflates those numbers, and SCA ceilings pinned at current-quarter market prices limit further spot upside while doing nothing to prevent normalization in the other 60% of revenue. Capex in a hawkish backdrop: Full-year FY2026 capex is guided to roughly $27 billion, with fiscal 2027 quarterly spending running above the Q4 pace. The 10-year Treasury sits at 4.58%, in the 98th percentile of the past year, as Micron writes checks for Idaho, New York, Taiwan, and Singapore fabs.
The Case for Waiting Micron will almost certainly print the guided Q4, order books stretch into 2027, and the SCAs make a 2016-style price crash unlikely. But management just admitted “we are at margin levels where incremental price yields less gross margin expansion” and flagged a $1 billion opex increase for FY2027. Existing holders face a different calculus than new buyers at $905, who would be underwriting a second leg the company itself is guiding to moderate.
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What the Stock Says Micron trades at $904.28, against a consensus analyst target of $1,486, implying meaningful upside if targets are met. Forward P/E is 6, trailing P/E 21, and a PEG of 0.14.
Coverage is lopsided: 9 Strong Buy, 31 Buy, 4 Hold, 0 Sell, and 1 Strong Sell. Shares are up 217.03% year to date and 654.1% over one year, versus roughly 10.6% for the S&P 500 YTD.
MU is off 4.69% on the week, 16.87% on the month, and fell 8.02% in the most recent session. The 50-day moving average of $907.42 is now essentially the price.
Why $905 Looks Stretched The path to further downside is short. Q4 will almost certainly beat, but the guided 86% gross margin is the ceiling by management’s own admission. As pricing moderates through calendar 2026, the market will re-rate a business that grew revenue 345.72% year over year off a depressed base. Forward P/E of 6 assumes those earnings hold.
Concentration risk is acute. HBM4 revenue depends on one lead customer. Any AI capex hiccup at a single hyperscaler reprices 33% of Micron’s mix overnight. Layer on $27 billion in fiscal 2026 capex, a $325 million debt prepayment loss last quarter, and a 10-year yield in the 98th percentile, and the financing backdrop for that spend is the worst it has been in a year.
What would invalidate the Sell? A clean HBM4E ramp with a second named lead customer, or SCA revenue crossing 50% of the mix with floor prices materially above prior peak margins. Neither is visible yet. A 654% one-year move already reflects the good news, and the setup asks new buyers to underwrite perfection at the exact moment management is guiding moderation.
History suggests chasing a memory stock the quarter after it prints an 84.9% gross margin has rarely worked out well.
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Shares of memory chipmakers are sliding again Thursday morning as fresh worries about Chinese competition ripple through the sector. Micron Technology (NASDAQ:MU | MU Price Prediction) stock is down 5% to $862, while SK Hynix‘s (NASDAQ:SKHY) U.S. ADR is off 7% to $164 in early trading.
SanDisk (NASDAQ:SNDK) shares are also down 7% to $1,505, and Western Digital (NASDAQ:WDC) shares have fallen 7% to $476. The move extends Wednesday’s rout, when the same group dropped 6% to 8%.
That two-day slide follows one of the most explosive runs in recent semiconductor memory. Heading into today, Micron stock was up 217% year to date (YTD), SanDisk shares were up 580% YTD, and Western Digital stock was up 199% YTD.
CXMT’s $8.6 Billion IPO Rattles the Memory Trade The catalyst is a China story. Reportedly, ChangXin Memory Technologies (CXMT), China’s leading DRAM maker and the world’s fourth largest, is set to IPO on Shanghai’s STAR Market on July 27, aiming to raise at least $8.6 billion in Asia’s largest share sale so far this year.
A well-funded domestic DRAM champion expanding capacity is stoking fears of intensifying Chinese memory competition and potential oversupply. That threat lands most directly on the DRAM leaders, which is why Micron and SK Hynix are taking the hardest hits.
So far, this remains a competition and sentiment fear with no confirmed hit yet to any company’s actual results. Per Counterpoint Research, SK Hynix leads the industry with 29% DRAM share and 58% high-bandwidth memory (HBM) share, sitting just ahead of Micron. Industry sources still see the memory shortage lasting beyond 2030.
Peers Follow the Move, ETF Sinks The sector proxy is confirming the damage. The Roundhill Memory ETF (NYSEARCA:DRAM) is down 7% to $53.66, with SK Hynix (weighting 24%) and Micron (24%) driving much of the pain in the fund.
The DRAM ETF is a narrow, volatile thematic fund with real concentration risk in its top holdings, and the ETF isn’t leveraged. Investors sizing their exposure through the fund are getting concentrated results in both directions.
SK Hynix’s ADR carries added ADR-premium risk after only recently beginning to trade on Nasdaq exchange. The listing has already swung from a large surge to sharp drops this week, so SK Hynix stock can move well outside normal single-name ranges intraday.
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Secondary drivers today include broad Asian-market volatility, cooling-AI-momentum jitters, and clear profit-taking after parabolic runs. Whether this is a healthy correction or the start of an AI-driven memory bubble bursting is a genuine, polarized debate right now.
Bull vs. Bear on Micron The bull case for Micron is intact on the fundamentals. Micron just reported Q3 FY2026 revenue of $41.5 billion, up 346% year over year (YoY), with GAAP gross margin of 85%, and guided Q4 FY2026 revenue to $50 billion at the midpoint.
CEO Sanjay Mehrotra stated that Micron’s results “reflect the strategic value of memory in the AI era.” On the other hand, the bear case leans on the CXMT threat, memory-industry cyclicality, and rich valuations after enormous gains.
Polymarket traders now put Micron stock in the $840 to $870 range by Friday’s close, with a 63% probability of another down day today. Western Digital is less directly exposed to the DRAM and NAND fight after the SanDisk spinoff, yet Western Digital shares are being pulled down with the group.
What to Watch Next CXMT’s July 27 IPO pricing and any updated color on Chinese memory capacity plans are the next real catalysts. Investors can watch for whether Micron stock holds above $860 into the close.
The Roundhill Memory ETF at $53 and change is a useful tape to track for whether today’s damage stabilizes or spreads to the rest of AI infrastructure. A second red close for the fund this week would suggest that the reset isn’t finished.
Given how violently these names are swinging in both directions, investors should consider keeping their position sizes modest on their memory exposure here. AI-driven memory demand remains real, but the price action is telling traders that valuation and Chinese-competition risks are back in play.
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Micron Technology's (MU 7.72%) stock is up nearly 700% in the past year. The semiconductor company is currently benefiting from an unprecedented supply shortage in memory chips driven by demand for artificial intelligence infrastructure.
I predict Micron stock will hit $1,875 per share after the company reports financial results for fiscal 2027, which will happen sometime in September 2027. That implies about 91% upside from the current share price of $982. Here's my rationale.
Image source: The Motley Fool.
Micron is growing very quickly due to a severe memory chip supply shortage Micron develops memory and storage solutions for cloud and enterprise data centers, mobile devices and other consumer electronics, and automotive systems. Its portfolio includes dynamic random-access memory (DRAM), high-bandwidth memory (HBM), and NAND flash products. All three types of memory are critical for artificial intelligence.
Micron is not the leader in any category. It ranks as the third-largest supplier of DRAM, it is tied with SK Hynix as the second-largest supplier of HBM, and it is tied with Sandisk as the fourth-largest supplier of NAND, per Counterpoint Research. But Micron is still growing very quickly due to an unprecedented memory chip supply shortage created by demand for AI infrastructure.
Micron reported exceptional financial results for the third quarter of fiscal 2026 (ended in May). Revenue rose 345% as NAND and DRAM prices doubled from the previous year, and non-GAAP (adjusted) net income soared more than 1,200%. Guidance for the current quarter suggests revenue will increase 340% and adjusted net income will soar by more than 900%.
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The memory chip industry has historically been defined by boom-and-bust cycles Memory chips have historically been one of the most cyclical semiconductor industries. The boom-and-bust dynamic works like this: Initially, some catalyst creates more demand than manufacturers can satisfy, driving memory prices higher. But supply eventually catches (and surpasses) demand because manufacturers inevitably produce too many chips, which forces them to cut prices.
Consider what happened during the COVID-19 pandemic: In 2021, memory chip sales surged during the transition to remote work as enterprises invested in cloud infrastructure and consumers bought computers and gaming consoles. But manufacturers oversupplied the market, so NAND and DRAM prices plunged about 70% when enterprise and consumer spending normalized by mid-2023.
Some analysts argue the current memory chip cycle is different, pointing to the 16 multiyear supply deals Micron has signed with customers, which offer some protection from the next downturn. But the four most dangerous words in investing are: This time is different. Several memory chipmakers have more production capacity coming online in 2027, so the imbalance in supply and demand could start closing in 2028.
Why Micron stock could hit $1,875 per share by late 2027 Micron trades at 12.4 times sales. That is a massive premium to the five-year average of 4.7 times sales. Of course, Micron's sales are growing very quickly, so the valuation is arguably justified. But history says the company's sales will drop (perhaps sharply) during the next downturn. For instance, Micron's sales fell 50% in fiscal 2023.
The stock market is forward-looking in nature. Investors will be looking through the cyclical peak in memory chip sales before the peak arrives, contemplating what Micron is worth in a downturn. If investors determine the company could lose substantial pricing power when additional memory chip supply hits the market in 2028, Micron's price-to-sales ratio could contract significantly in 2027.
So, I will assume Micron stock trades at 8.5 times sales in late 2027; I arrived at that figure by splitting the difference between the current valuation and the five-year average. The Wall Street consensus puts Micron's revenue at $250 billion in fiscal 2027 (ends in August). If the stock trades at 8.5 times sales, the company will be worth $2.1 trillion. That implies about 91% upside from its current market value of $1.1 trillion.
In turn, 91% upside implies the stock price will hit $1,875 per share by late 2027, up from $982 per share today. Of course, I made several assumptions to arrive at that prediction, some of which will probably prove incorrect. In particular, the market may afford Micron a lower valuation multiple by late 2027, one that more closely tracks the five-year average.
Nasdaq futures fell 0.21%, while S&P 500 futures slipped 0.04%. The decline appeared to reflect broader weakness in technology stocks and profit-taking after Micron’s strong rally over the past year.
The softer futures market weighed on higher-beta chip stocks before the opening bell. Micron remains well above its longer-term trend levels, but investors have become more cautious following signs that the stock’s recent momentum has slowed.
Cash Flow Outlook Draws Bullish ViewAlger Executive Vice President Ankur Crawford said Wednesday that Micron’s earnings power remains underappreciated. Crawford said that if she were buying just one stock right now, it would be Micron.
Speaking on CNBC, Crawford said the company could generate cash flow equivalent to roughly 30% of its current market capitalization over the next 18 months and as much as 50% over a longer period.
She attributed that outlook to persistent shortages in high-end DRAM, which continue to support pricing. Although China could eventually emerge as a larger competitor in memory, Crawford said she does not expect that risk to materially affect the market until 2029 or 2030.
She added that investors are prematurely assuming the memory cycle is nearing its peak, arguing that supply constraints could keep earnings growing into 2027 or 2028.
Technical Picture Remains MixedMicron continues to trade in a long-term uptrend. The stock is 31.4% above its 100-day simple moving average and 86.2% above its 200-day average.
However, shares have fallen 14.9% below the 20-day moving average and 4% below the 50-day moving average. That suggests the stock is experiencing a short-term pullback within a broader bullish trend.
The moving averages remain in a positive alignment, with the 20-day average above the 50-day average and the 50-day average above the 200-day average. Still, the stock is trading below its shorter-term averages, indicating buyers have become more selective.
Momentum indicators also point to cooling strength. The MACD remains below its signal line, suggesting upside momentum has weakened.
A key support level sits near $854.50. A break below that level could increase selling pressure.
Earnings And Analyst OutlookWall Street expects Micron to report quarterly results around Sept. 22.
Analysts project earnings of $31.24 per share, up sharply from $3.03 a year earlier. Revenue is expected to increase to $50.72 billion from $11.31 billion.
The stock carries a consensus Buy rating with an average price target of $1,548.86. Recent analyst actions include:
KeyBanc raised its price target to $1,750 and maintained an Overweight rating on July 14. Cantor Fitzgerald raised its price target to $2,000 and maintained an Overweight rating on June 29. Cantor Fitzgerald maintained its Overweight rating and $1,500 price target on June 25. ETF ExposureAs a result, strong inflows or outflows in those funds can affect demand for Micron shares.
MU Stock Price Activity: Micron Technology shares were down 1.97% at $886.45 during premarket trading on Thursday, according to Benzinga Pro data.
Image via Shutterstock
Market News and Data brought to you by Benzinga APIs
There is a lot of debate about whether the artificial intelligence (AI) infrastructure build-out is a bubble. The amount of money being spent building out AI data centers is astronomical, with the four largest hyperscalers -- Amazon (AMZN +2.97%), Microsoft (MSFT +2.70%), Alphabet (GOOGL +3.15%) (GOOG +3.57%), and Meta Platforms (META +3.06%) -- alone set to spend more than $700 billion this year. That's more than the gross domestic product (GDP) of all but two dozen countries last year.
Meanwhile, AI spending as a percentage of global GDP is nearing bubble levels of past cycles. Goldman Sachs projects total AI capital expenditures at around $765 billion in 2026, while U.S. GDP is expected to be around $32.4 trillion. That would be 2.4% of U.S. GDP, which is above levels seen in past innovation cycles, such as the dot-com bubble.
However, we are in a much more global interconnected economy today than 25 years ago, and from that perspective, AI spending is only about 0.6% of the 2026 projected global GDP of $126 trillion. While the big hyperscalers are U.S. companies, they have global operations and are building AI data centers worldwide.
Valuations look reasonable From a stock valuation perspective, meanwhile, the market looks very different from the dot-com era. At that time, hardware companies like Cisco and Sun Microsystems traded at huge forward price-to-earnings (P/E) multiples, with Cisco topping 100x at its peak in 2000.
Nvidia (NVDA +0.29%), on the other hand, trades at a modest forward P/E of 23.5 times fiscal 2027 (ending January 2027) analyst earnings estimates. Meanwhile, memory company Micron Technology (MU 7.72%) trades at a multiple of just 6.5 times fiscal 2027 analyst estimates, as investors are cognizant of memory cycles and show restraint, not being irrationally enthusiastic.
There are some outliers. Space Exploration Technologies (SPCX 0.59%) IPO'd to a huge valuation, but it is more of an outlier than the rule. Elon Musk's companies, like Tesla (TSLA 0.48%), have always gotten the benefit of the doubt and commanded high premiums.
Palantir (PLTR +0.01%) also has a frothy valuation, trading at a forward price-to-sales (P/S) ratio of 42 times; however, most software-as-a-service (SaaS) stocks have actually traded at dramatically lower multiples. That's much different from the dot-com boom, when seemingly all internet stocks were on a tear, even those with questionable business models.
Image source: Getty Images.
Meanwhile, the hyperscalers doing the bulk of this spending are among the best companies on the planet. They have other strong core businesses that generate significant operating cash flow, helping pay for much of their AI infrastructure spending.
And if you are worried about the potential of an AI bubble but still want to participate in the AI upside, the hyperscalers are the perfect stocks for this. They all have strong core businesses that are benefiting from AI, and either they make money from their spending, helping lift their stocks, or they stop spending and start generating a lot of free cash flow.
It's a win-win type of situation, and that's why Amazon, Alphabet, and Meta Platforms are three of my favorite stocks to own right now.
Geoffrey Seiler has positions in Alphabet, Amazon, and Meta Platforms. The Motley Fool has positions in and recommends Alphabet, Amazon, Cisco Systems, Goldman Sachs Group, Meta Platforms, Micron Technology, Microsoft, Nvidia, Palantir Technologies, and Tesla. The Motley Fool has a disclosure policy.
Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>
Here are the key points:
The big banks have kicked off the Q2 earnings season with remarkable momentum. Both earnings and revenue growth rates—along with the percentage of companies beating expectations—are tracking significantly higher than in recent quarters. While we are still in the opening stages of the Q2 reporting cycle, these early results strongly reinforce the robust corporate earnings trend we've been seeing.For the 34 S&P 500 companies that have reported Q2 results already, total earnings are up +55.3% from the same period last year on +18.8% higher revenues, with 91.2% beating EPS estimates and 82.4% beating revenue estimates.The Q2 earnings and revenue growth rates have been boosted by Micron’s ((MU - Free Report) ) very strong quarterly results, but the earnings and revenue growth rates would still compare favorably with other recent periods when we exclude Micron from these results. Excluding Micron, Q2 earnings for the remaining 33 index members that have reported Q2 results would be up +21.5% (vs. +55.3% otherwise) on +12.5% higher revenues (vs. +18.8% otherwise). For the Finance sector, we now have Q2 results from 36.6% of the sector’s market capitalization in the S&P 500 index. Total earnings for these Finance companies are up +30.2% from the same period last year on +20.4% higher revenues, with all the companies beating EPS estimates and 90.9% beating revenue estimates. This is a notably better performance from these Finance companies relative to what we have seen from the group in other recent periods.Banks Kick off the Q2 Earnings Season in StyleThe big banks and brokers kicked off the Q2 reporting cycle in style, comfortably beating consensus EPS and revenue estimates and providing reassuring reads on underlying trends in their businesses. JPMorgan’s (JPM - Free Report) Q2 earnings increased +21.7% from the same period last year on +27.7% higher revenues, while those for Bank of America (BAC - Free Report) , Citigroup (C - Free Report) , and Wells Fargo (WFC - Free Report) increased +27.5%, +45.1%, and +18.4%, respectively.
Bank stocks in general and these four stocks in particular have enjoyed a decent but otherwise unspectacular run this year, as some of the earlier geopolitical risk factors have eased lately. Banks are cyclical businesses, so any real or perceived reduction in economic risk is positive for their outlook.
The chart below shows the year-to-date performance of JPMorgan, Bank of America, Citigroup and Wells Fargo shares relative to the S&P 500 index and the Zacks Finance sector.
Image Source: Zacks Investment Research
Boosted by the strong results from these banks, total Q2 earnings for the Zacks Investment Banks/Managers industry, of which JPMorgan, Bank of America, Citigroup and Wells Fargo are a part, are expected to increase by +32.1% from the same period last year on +12.1% higher revenues, as the table below shows.
Image Source: Zacks Investment Research
For the Finance sector as a whole, Q2 earnings are expected to increase by +22.2% on +11.7% higher revenues, following the sector’s +25.6% earnings growth on +9.8% higher revenues in the preceding period. The chart below shows the earnings and revenue growth picture for the Zacks Finance sector on a quarterly basis.
Image Source: Zacks Investment Research
The chart below shows the sector’s earnings growth picture on an annual basis.
Image Source: Zacks Investment Research
The Finance sector is the second largest earnings contributor to the S&P 500 index, behind only the Tech sector, accounting for 16.4% of the index’s expected forward 12-month earnings.
The Earnings Big PictureThe chart below shows S&P 500 expectations for 2026 Q2 in terms of what was achieved in the preceding four periods and what is currently expected for the following three quarters.
Image Source: Zacks Investment Research
The chart below shows the overall earnings picture for the S&P 500 index on an annual basis.
Image Source: Zacks Investment Research
As with estimates for Q2, estimates for full-year 2026 have also been steadily going up, particularly since the start of March. The chart below shows the evolution of aggregate S&P 500 earnings estimates since last July.
Image Source: Zacks Investment Research
Full-year 2026 earnings estimates have increased for 11 of the 16 Zacks sectors since the start of March, with the most pronounced gains at the Energy, Basic Materials, Tech, Industrials, Utilities, and Business Services sectors. On the negative side, estimates have been under pressure for the Transportation, Autos, Medical, and Consumer Discretionary sectors since the start of March. History suggests that these favorable revisions will get a boost from the Q2 earnings season and updated management guidance.
Financial disclosures from the US Office of Government Ethics reveal President Donald Trump’s investment accounts have executed over 6,100 trades this year.
While these accounts are controlled by independent “third-party” managers – their moves offer a fascinating window into Wall Street’s current artificial intelligence (AI) playbook.
The most striking trend? Trump’s managers have been systematic net sellers of memory-chip firm Micron MU, while they have aggressively accumulated shares of the AI leader, Nvidia (NVDA).
For retail investors trying to navigate the volatile artificial intelligence landscape, this divergence in a high-profile portfolio raises a critical question: why favour one tech titan over the other in 2026?
Trump’s managers choosing to unload MU shares likely doesn’t have anything to do with financial weakness or structural concerns.
After all, the memory chips specialist recently posted a stunning Q3 earnings release – featuring a more than 4x increase in revenue to $41.4 billion as a global shortage doubled memory chip prices.
Micron Technology Inc is also mitigating its boom-and-bust cycles by signing multiyear contracts that secure stable, long-term pricing.
Still, Trump’s managers have trimmed holdings by up to $116,000, likely because Micron reached a stretched valuation.
With memory supply expected to catch up to demand by 2028, Wall Street anticipates a potential price correction. This prompted savvy managers to lock in massive profits before cyclical cooling begins.
That said, Wall Street analysts remain bullish as ever on Micron stock for the next 12 months.
The consensus rating on MU remains at “Buy”, with the mean price target of $1,579, according to WSJ, indicating potential upside of nearly 60% from current levels.
While NVDA stock has been rather muted for an AI darling this year, Trump accounts have bought as much as $3.7 million worth of it.
Why? Perhaps because the company remains the uncontested gold standard of AI infrastructure – controlling over 80% of the accelerator market.
Its latest financial report showed a spectacular 85% revenue leap to just under $82 billion on huge data center demand.
Plus, Nvidia’s chips are the most efficient, yielding the lowest operational cost per token for clients.
With its ultra-powerful Vera Rubin platform entering volume production and the new RTX Spark superchip poised to disrupt the personal computer market – investment managers likely see Nvidia stock as a safer, more dominant long-term compounder, especially as its forward valuation multiple sits at a major discount to its historical averages currently.
Wall Street firms are just as bullish on Nvidia stock as well.
The consensus rating remains at “Buy,” with the mean price target of about $314 signaling potential upside of about 50% from here.
Key Takeaways SK Hynix's U.S. listing sparked launches of 2X leveraged ETFs SKHL and HYNX. AI-driven HBM demand and policy support could fuel SK Hynix's long-term growth. Leveraged ETFs suit active traders only due to daily resets and higher risk. South Korean memory chip giant SK Hynix just made a debut on Wall Street under the ticker code of (SKHY - Free Report) . The stock surged 28.3% on July 14, 2026, indicating massive investor interest in the stock.
The company raised approximately $26.5 billion through the offering, making it the largest U.S. IPO ever by a foreign company, according to Bloomberg data, as mentioned on Yahoo Finance.
AI Boom Fuels Memory Chip DemandSK Hynix is benefiting from explosive demand for high-bandwidth memory (HBM) and advanced storage chips, both of which are essential for artificial intelligence (AI) infrastructure. The rapid expansion of AI data centers has created a global shortage of memory products, affecting industries ranging from cloud computing to consumer electronics.
As one of NVIDIA's key suppliers, SK Hynix is expanding manufacturing capacity to meet rising demand driven by the global AI investment cycle.
Political Tailwind South Korea's ruling party has proposed easing regulations to allow SK Hynix to establish factory ventures with outside investors, as the government seeks to strengthen the country's position as a global AI powerhouse, per Reuters. The amendment would remove a restriction that currently prevents subsidiaries of subsidiaries in strategic high-tech industries from forming such ventures.
U.S. Listing Broadens Investor AccessThe Nasdaq listing makes SK Hynix shares significantly easier for U.S. investors to own, particularly retail investors and smaller institutional funds. No wonder, exchange-traded fund (ETF) issuers will leave no stone unturned to tap this IPO euphoria.
SK Hynix-Heavy Leveraged ETFs Hit the Market Two issuers have rolled out new leveraged exchange-traded funds tied to SK Hynix, giving U.S. traders a way to amplify exposure to one of the world's most important AI memory chipmakers following the company's recent U.S. ADR listing on July 10, 2026.
Direxion Launches SKHLDirexion introduced the Direxion Daily SK Hynix Bull 2X ETF (SKHL). SKHL seeks daily investment results, before fees and expenses, of 200% of the daily performance of the SK Hynix Inc.-sponsored American depositary receipt. The ETF is aimed at active traders looking to capitalize on short-term moves in SK Hynix, a leading supplier of HBM chips.
REX Shares and Tuttle Capital Introduce HYNXSeparately, REX Shares and Tuttle Capital Management launched the T-REX 2X Long SKHY Daily Target ETF, ticker HYNX.
Like SKHL, HYNX seeks to provide 2X the daily return of SK Hynix, before fees and expenses. The fund came just days after SK Hynix's U.S. listing, giving traders a leveraged way to gain exposure to the world's leading supplier of high-bandwidth memory, a key component used in AI data centers. The issuers highlighted SK Hynix's leadership in HBM, alongside its broader DRAM and NAND flash memory businesses.
HYNX expands the T-REX family to more than 40 leveraged and inverse single-stock ETFs, which already include products linked to Tesla, NVIDIA, and Robinhood.
Supply Constraints Could Persist for YearsIndustry analysts expect tight supply conditions in the chip market to continue through the end of the decade, as building new semiconductor fabrication facilities requires significant capital and several years to complete. To secure future supply, memory manufacturers are increasingly signing long-term agreements with customers.
Inside the Valuation ComparisonSK Hynix (000660.KS) currently has a trailing 12-month (TTM) price/earnings (P/E) ratio of 18.11X, while its forward P/E ratio stands at 6.28X, per Yahoo Finance data. In contrast, its competitor Micron Technology (MU - Free Report) trades at a P/E (TTM) of 21.18X. MU shares currently trade at a forward 12-month price-to-earnings (P/E) multiple of just 6.05X. This shows that SK Hynix’s valuation is on par with its U.S.-based peers.
Bottom LineAs a caveat, investors should note that such products are suitable only for short-term traders as these are rebalanced on a daily basis. These products are riskly in nature.
Topsy-turvy Micron (MU 7.72%) stock took another tumble on Wednesday, sliding an unlucky 7.7% through 2:50 p.m. ET after Warren Buffett warned that it's becoming "tough to find values when everybody is preferring gambling" on the artificial intelligence revolution and similar themes.
Image source: Micron.
Making sense of Micron Investors have been running hot and cold on semiconductor stocks like Micron for weeks -- sometimes responding to the very same news with buying or selling, depending on the day of the week.
For example, after South Korea's SK Hynix (SKHY 9.00%) began selling stock on the Nasdaq last week, investors first bought computer memory semiconductor stocks on the theory that SK's CEO thought demand would outstrip supply for years. They then turned around and sold these same stocks a few days later, though, worried that SK Hynix's plans to increase production to satisfy this memory demand might hurt prices and profits for both SK and its competitors (like Micron).
So basically, Buffett is right: investors are taking each bit of news as it happens, and gambling on whether it might drive memory stocks up or down.
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What's next for Micron stock Does this mean investors are finally becoming rational by selling Micron stock, though? Not necessarily.
At 22 times earnings today, the stock doesn't look particularly expensive -- not when analysts polled by S&P Global Market Intelligence are forecasting a ten times improvement in earnings this year, and for profits to double again next year, and average 172% annual increases over the next five years. If Micron misses those estimates by half, it's still probably an incredible bargain at today's prices.
Simply put, if you do the math, there's no need to gamble on Micron: This stock is still plenty cheap to buy.
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.
BOISE, Idaho, July 15, 2026 (GLOBE NEWSWIRE) -- Micron Technology, Inc. (Nasdaq: MU) announced today that company executives will participate at the KeyBanc Capital Markets Technology Leadership Forum in Deer Valley, Utah, on Monday, August 10, at 8:00 a.m. Mountain Time.
Live webcasts and subsequent replays of presentations can be accessed from Micron’s Investor Relations website at investors.micron.com/.
About Micron Technology, Inc.
Micron Technology, Inc. is an industry leader in innovative memory and storage solutions transforming how the world uses information to enrich life for all. With a relentless focus on our customers, technology leadership, and manufacturing and operational excellence, Micron delivers a rich portfolio of high-performance DRAM, NAND, and NOR memory and storage products. Every day, the innovations that our people create fuel the data economy, enabling advances in artificial intelligence (AI) and compute-intensive applications that unleash opportunities — from the data center to the intelligent edge and across the client and mobile user experience. To learn more about Micron Technology, Inc. (Nasdaq: MU), visit micron.com.
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
The Direxion Daily Semiconductor Bear 3X Shares (NYSEARCA:SOXS) is up again today, climbing roughly 11% as memory chip stocks lead a broad semiconductor pullback. The move is a mirror image of what is happening under the hood: Micron Technology (NASDAQ:MU | MU Price Prediction) is down about 8% intraday and SK Hynix (NASDAQ:SKHY) is down 11%, dragging the Invesco PHLX Semiconductor ETF (NASDAQ:SOXQ) down with them, and SOXS is designed to deliver three times the daily inverse of that basket. So, when chips are down by a certain amount, SOXS is generally up about 3x that (and vice versa).
The Trigger: A Chinese DRAM IPO Reprices the Competitive Map According to reporting from Barron’s, Chinese memory maker CXMT (ChangXin Memory Technologies) is set to begin taking orders for a listing on Shanghai’s STAR Market, aiming to raise roughly $8.5 billion, nearly double its initial target, at an implied market capitalization over $80 billion. That is a much larger war chest than investors expected for the country’s leading DRAM producer.
Why it lands so hard on Micron and SK Hynix: DRAM is a near-oligopoly. Three companies, Micron, Samsung, and SK Hynix, have historically controlled the bulk of global supply. CXMT is the world’s fourth-largest DRAM manufacturer, with DRAM share that roughly tripled year over year to about 8% in Q1, per Counterpoint Research. That is still well behind Micron at around 22% DRAM share, but the direction of travel is what spooked memory investors this morning. A well-funded fourth player with a mandate to keep expanding capacity is exactly what a supply-constrained market does not want to see.
There is an important limit that keeps this from being an existential threat. CXMT is constrained by US sanctions that curb its access to the most advanced chipmaking equipment, so it cannot easily supply US customers or produce the most advanced high-bandwidth memory (HBM) that powers AI servers. HBM is the fastest-growing, highest-margin corner of DRAM, and it remains the domain of Micron and the two Korean incumbents. Still, more Chinese standard-DRAM supply pressures pricing across the industry, and Micron generates the large majority of its revenue from DRAM, including HBM.
Why the Selloff Is Notable Given Micron’s Fundamentals The competitive-share worry is hitting a stock that has been one of the year’s biggest AI beneficiaries. Micron is up roughly 245% year to date and about 730% over the past year, and the company most recently reported fiscal Q3 2026 revenue of $41.46 billion, up 346% year over year, with non-GAAP EPS of $25.11. CEO Sanjay Mehrotra said the results “reflect the strategic value of memory in the AI era” and guided Q4 revenue to $50 billion, plus or minus $1 billion, with gross margin near 86%. The stock carries a market capitalization of roughly $1 trillion and trades at about 6 times forward earnings, with a consensus analyst price target of $1,486. The fundamental picture remains intact. What changed today is the perceived competitive slope.
SK Hynix just listed in the USA as an ADR; its price is suffering today from the same DRAM competition fears plus profit-taking after a strong memory rally. When the two largest DRAM suppliers by market value both drop together, the semiconductor index has nowhere to hide, and that is precisely the setup SOXS is built to profit from on a single-day basis.
The Leverage Warning: SOXS Is a Short-Term Tactical Vehicle Today’s pop is dramatic, but it sits inside a brutal trend. Even with today’s pop and an amazing one-month return of over 1,000%, SOXS is still down 22% YTD, 66% over the last year, and 99.7% over the last five years, per Yahoo Finance.
Leveraged and inverse funds compound daily, which means a choppy but rising underlying index produces significant volatility drag on the inverse side. SOXS amplifies moves in both directions, and over any period longer than a single session the path matters as much as the destination. It is a short-term tactical vehicle for traders who want to press a specific view on chips over hours or days, or a hedging overlay for a semiconductor-heavy book. For anyone thinking about the AI hardware trade over a longer horizon, 24/7 Wall St. maintains a broader look at the names driving it in its 7 Stocks Powering the AI Boom research.
What to Watch Next The near-term question for memory stocks like Micron and SK Hynix, and therefore SOXS, is whether the CXMT overhang is a one-day repricing or the start of a rerating of DRAM’s supply outlook. Micron’s HBM franchise, where the company noted HBM4 in high-volume shipments and HBM4E targeting calendar 2027 volume production, remains outside CXMT’s reach under current export controls. If pricing on standard DRAM holds and HBM demand from AI accelerator makers stays firm, today’s move looks more like a sentiment shock than a fundamentals event. If Chinese capacity ramps faster than expected, the memory cycle’s next leg gets more complicated, and vehicles like SOXS will keep drawing tactical flows on the down days.
Contact [email protected] for any questions or corrections.
Over the past 12 months, Micron Technology (MU 6.99%) has been one of the hottest stocks in the stock market. It's up around 680% in that span, far outperforming every major U.S. index and all the "Magnificent Seven" stocks as of July 13. It's currently valued at around $1.05 trillion (the 15th most valuable public company in the world), but at its peak, its valuation reached $1.37 trillion.
Despite Micron's current momentum (up 193% this year), there's another popular tech stock that I'd invest in before Micron, even though Micron's returns are more than 28 times higher over the past year: Nvidia (NVDA 0.58%). It's been a "down" year for Nvidia so far -- it's only up 8% year to date -- but I like its long-term appeal more than Micron's right now.
Image source: The Motley Fool.
What Micron has working in its favor Micron is a memory and storage chip company that has found itself in the right place at the right time. As major AI hyperscalers -- such as Amazon, Microsoft, and Alphabet -- have spent (and plan to continue spending) billions building out data centers, companies that make the hardware that populates those data centers have seen surges in demand.
One key piece of hardware is the memory chips that Micron makes. Unfortunately for the AI hyperscalers, the sudden increase in demand has far outweighed the current supply of these chips. Fortunately for Micron, the supply-demand imbalance has allowed it to jack up prices and noticeably increase its profitability and margins.
In its most recent quarter (ended May 28), Micron's revenue increased 346% year over year to $41.5 billion, and its net income increased 1,398% to $28.2 billion.
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What Nvidia has working in its favor Nvidia's graphics processing units (GPUs) are the go-to chips in the AI world. These units, and its software system, are why Nvidia is crucial to the AI ecosystem. It's also why its valuation has soared over the past few years, and it now sits as the world's most valuable public company, with a market cap of over $4.9 trillion.
Since the current AI infrastructure build-out began, Nvidia has had a virtual monopoly on AI accelerator chips, and it has transformed its business. In its latest quarter (ended April 26), Nvidia made $81.6 billion in revenue, up 85% from the same quarter last year. Of that $81.6 billion, $75.2 billion (92%) came from its data center segment.
Data center hardware and software are now Nvidia's bread and butter, but it still has a presence in gaming and robotics that keeps it somewhat diversified.
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210.56
Why I would go with Nvidia over Micron Although Micron is undoubtedly the hotter stock right now, it's important to remember just how cyclical the memory hardware industry can be. The industry is riding high right now because of supply-demand imbalances, but that won't always be the case. Micron alone is spending around $27 billion this year to build out new facilities to ramp up production.
Once supply inevitably catches up to demand -- especially as competitors like SK Hynix and Samsung Electronic also ramp up supply -- Micron is likely to see its pricing power significantly reduced.
Nvidia's business isn't foolproof by any means. Major companies like Amazon, Microsoft, and Alphabet are beginning to develop their own advanced AI chips to reduce their dependence on Nvidia, but Nvidia is much more than just its chips. It has managed to build a full-stack ecosystem that includes software that developers have grown accustomed to. Jumping ship from Nvidia's ecosystem isn't easy or cheap.
With a valuation near $5 trillion, it would be much tougher for Nvidia to double in value than it would be for Micron, but I believe Micron has a much higher chance of a correction than Nvidia does. My preference for Nvidia has just as much to do with its long-term trajectory as it does with limiting potential downside.
