South Korean memory chip maker SK Hynix, rival to Samsung and U.S.-based Micron, is planning to sell nearly 17.8 million shares in a U.S. IPO, the company said on Monday. Should its shares sell well (and there’s indication that they will), the company could raise around $28 billion, based on SK Hynix’s closing share price last Friday in Seoul, Bloomberg reports.
SK Hynix will be offering American depositary receipts (ADRs), a type of certificate that lets U.S. investors buy a foreign stock without trading directly on an overseas exchange. Each ADR will represent a tenth of a common share. It is expected to price those securities on Thursday and begin trading on Friday.
Like Micron, SK Hynix is riding an AI-fueled boom credited to AI in both sales and stock price. Its first quarter revenues were up nearly 200% over the same quarter last year, it said, and its stock is up about 260% so far this year. This is because systems that run AI are very memory intensive. As hyperscalers like Amazon, Microsoft, Google, and Oracle race to build out so-called AI factories, and as new AI data centers multiply nationwide, demand has outpaced supply, creating a shortage of memory chips — including High Bandwidth Memory (HBM), DRAM, and NAND (the different types of chips that store and move data inside AI systems). The situation has been called “RAMageddon.” Apple executives said the shortage is forcing it to raise prices on Mac computers and iPads.
South Korean tech companies, led by SK Hynix and Samsung, have vowed to spend over $550 billion on building out new manufacturing capacity to keep up. That’s actually a risky venture. By the time those facilities are built, memory needs for AI may change, leaving them with more supply than the market wants and, potentially, crashing prices. But for now, Wall Street is looking for another Nvidia and memory chip makers are among the closest options that they have.
Micron, the closest U.S. comparison, has shot up nearly 700% over the past year to a more than $1 trillion valuation, fueled by record AI-driven memory demand and revenue.
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Micron Technology (MU +1.18%) stock has been on a tear over the past year. Shares of the memory specialist have jumped nearly 8x in a short time, driven by a rapid increase in demand for memory chips that has overwhelmed supply.
The memory supply shortage has been a massive tailwind for Micron Technology's bottom line. The company's earnings have been growing exponentially due to the incredible rise in memory prices. However, Micron's peers, Samsung and SK Hynix, have ambitious investment plans that could significantly reduce the supply demand gap in the memory industry.
That may not be a good thing for Micron stock. Here's why.
Image source: Micron Technology.
SK Hynix and Samsung are the kingpins of the memory industry As reported by Reuters, South Korea aims to double its memory chip production capacity over the next five years. Samsung and SK Hynix are going to play a key role in this expansion, as they have pledged an investment of just over $2 trillion.
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Given that Samsung and SK Hynix are among the world's largest memory chip suppliers, their massive investments could significantly reduce the demand-supply gap. Specifically, the two Korean giants control 67% of the global dynamic random-access memory (DRAM) capacity, according to Counterpoint Research. Their combined share of the NAND flash storage market stands at 47%.
Micron, for comparison, controls 22% of the DRAM market and 13% of the NAND flash market. So, Samsung and SK Hynix can influence the global memory in a big way. This doesn't bode well for Micron, as its pricing power could take a hit if Korean competitors add substantial new capacity. Even analysts are worried that this capacity expansion could create an oversupply, and that could negatively impact memory prices.
Does this mean it is time to book your profits in Micron stock? Not necessarily.
Micron's impressive growth is here to stay Adding new memory production capacity takes time. Building a memory fab can take anywhere between three to five years. So, even if SK Hynix and Samsung accelerate their infrastructure build-out, it will take a few years for them to start producing memory chips from their new facilities. Moreover, Samsung and SK Hynix are likely to monitor memory demand to ensure that they don't end up in an oversupply situation, which has hurt both companies in the past.
Additionally, SK Hynix's chairman believes that the additional capacity won't be enough to address the supply shortage. It is easy to see why that's the case. The high-bandwidth memory (HBM) used in AI chips consumes 3x as much wafer capacity as conventional memory chips. With HBM demand anticipated to increase at an annual rate of 42% through 2033, the ongoing shortage in the console, smartphone, and personal computing (PC) markets is likely to persist.
And as the new capacity comes online, it is likely to be absorbed by the markets where there is currently a major shortage. For instance, smartphone sales are anticipated to decline by 13.9% in 2026, according to IDC. The firm anticipates a 1.1% drop next year before growth resumes in 2028. Higher memory prices have been affecting smartphone sales, so any additional capacity could go toward satisfying pent-up demand in this market over the next couple of years.
So, the structural growth of the memory market due to the advent of AI should ideally prevent a downturn. That's why Micron investors shouldn't worry as the favorable conditions driving its growth are likely to persist.
This is probably why analysts are predicting that the company will clock outstanding earnings growth.
Data by YCharts
Moreover, Micron's price-to-earnings ratio of 23 makes it too cheap to ignore, considering its astronomical growth and sunny outlook. The tech-focused Nasdaq-100 index trades at 35 times earnings, which means Micron is a value stock. Assuming Micron trades at even 25 times earnings at the end of fiscal 2028 and its earnings per share reach $167.92, the company's stock price could jump to $4,198.
That's just over 4x its current stock price. So, investors can continue holding this AI stock in their portfolios, or even buy more, as it could keep skyrocketing.
Characteristics and Risks of Standardized Options: https://bit.ly/2v9tH6D. Citi issued a 90-day "catalyst watch" for Micron (MU) on Monday after shares saw a substantial sell-off last week.
Key Takeaways SanDisk surged 858% in H1'26, driven by AI-led demand for NAND flash and enterprise SSDs.SNDK's datacenter revenues jumped 233% sequentially to $1.47 billion in fiscal Q3 2026.KWIN and CSD rank SNDK among top holdings, offering diversified exposure to the stock. Memory giant SanDisk (SNDK - Free Report) has emerged as the undisputed standout performer in the S&P 500 during the first half of 2026, with its shares skyrocketing an incredible 858%. This meteoric rise, fueled by explosive demand for its NAND flash memory, has made it the top-gaining stock in the index, leaving the second-best performer, Micron Technology (MU - Free Report) , which gained around 300%, far behind.
For investors who missed this remarkable surge, the key question is how to gain exposure without investing in a stock at an elevated valuation.
One prudent alternative is to consider exchange-traded funds (ETFs) that hold SanDisk as a top component. This approach offers diversified exposure to the company's potential while mitigating the risks associated with its current lofty valuation and the inherent volatility of individual memory stocks.
But before diving straight into those ETFs, one needs to understand the growth catalysts that drove SNDK to such high levels and whether they are sustainable over the long run; otherwise, gaining exposure to SanDisk-heavy ETFs will be meaningless. This understanding is crucial for a prudent investor to make an informed decision.
What Drove SanDisk to Skyrocket in H126?The primary catalyst behind SanDisk's historic surge was the rapidly accelerating artificial intelligence (AI) infrastructure buildout across the globe. Since AI models require massive, high-speed storage for training and inference, demand for enterprise solid-state drives (SSDs) skyrocketed over the past few quarters. This demand boom led to a powerful pricing cycle and significantly higher average selling prices for data storage devices like those manufactured by SanDisk.
Furthermore, SanDisk's spin-off from Western Digital allowed it to operate as a pure-play NAND company, making it a direct beneficiary of this AI-driven storage boom without the distraction of a legacy hard-drive business.
The numbers speak for themselves: SanDisk's fiscal third-quarter 2026 datacenter revenues rose 233% sequentially to $1.47 billion, with Enterprise SSDs now representing about 25% of the company's overall portfolio. This remarkable growth underscores just how deeply AI-led demand boom for NAND technology is bolstering SanDisk's business trajectory.
SNDK’s Growth Potential & the Case for ETFsDespite SanDisk's massive rally in recent months, the stock still has further upside potential. As the memory chip shortage is expected to persist, with industry projections suggesting supply-demand imbalances could continue through 2027, explosive demand for NAND flash will continue to outstrip supply. This should continue to fuel SNDK’s rally, at least in the near term.
The stock’s short-term average price target of $2,073, offered by 18 analysts, currently represents an upside of 18.8% from the last closing price of $1,745.
Over the long run, SanDisk’s massive multi-billion-dollar Flash Ventures partnership with Kioxia should help it secure NAND supply availability, with plans to double wafer capacity by fiscal 2029.
However, the stock remains highly volatile, as evidenced by its recent 14% decline on a single trading session during a broader AI chip selloff, reminding investors that significant profit-taking can occur at any time after such an extraordinary run.
Against this backdrop, investing through an ETF provides a more balanced approach. ETFs offer instant diversification, reducing the impact of SanDisk's inevitable volatility on your overall portfolio while allowing you to benefit from the upside of industry leaders.
ETF ExposureFor investors who believe in the long-term AI storage thesis and SanDisk profiting from it, gaining exposure to the following ETFs, with SNDK in their top positions, can be a prudent strategy at this moment:
KraneShares Wahed Alternative Income Index ETF (KWIN - Free Report)
This fund, with net assets worth $56.4 million, offers exposure to U.S.-domiciled companies that pass strict Islamic ethical screenings. SNDK holds the first spot in this fund, with 17.01% weightage.
KWIN has risen 3.1% year to date. The fund charges 51 basis points (bps) in fees.
First Trust US Equity Opportunities ETF (FPX - Free Report)
This fund, with net assets worth $1.59 billion, offers exposure to 100 U.S. companies that have recently gone public, including initial public offerings (IPOs) and spin-offs, as well as select acquirers of recent IPOs. SNDK holds the second spot in this fund, with 8.40% weightage.
FPX has soared 19.3% year to date. The fund charges 57 bps in fees.
Invesco S&P Spin-Off ETF (CSD - Free Report)
This fund, with a market value worth $224.2 million, offers exposure to 26 companies that have been spun off from larger corporations within the past four years. SNDK holds the second spot in this fund, with 7.65% weightage.
CSD has rallied 35.3% year to date. The fund charges 69 bps in fees.
Description: Rick Ducat's theme for today's Big Moves is centered on outsized bearish options activity. He walks us through strange trades he found in the Invesco QQQ Trust (QQQ), Micron (MU), and SanDisk (SNDK).
The stock market is having a good year. The Nasdaq-100 technology index is up 17%, while the more diversified S&P 500 has gained 9%. But at the start of April, Roundhill Investments launched a new exchange-traded fund (ETF) that has already risen 121%.
It's called the Roundhill Memory ETF (DRAM +6.81%), and as the name suggests, it exclusively invests in semiconductor companies that design, manufacture, and distribute memory chips and components. There is currently a global shortage of memory due to substantial demand from the artificial intelligence (AI) industry, which is fueling a surge in revenue and earnings for almost every top supplier.
But despite the memory industry's obvious tailwinds, this ETF isn't a clear-cut buy. Here's what investors need to know.
Image source: Getty Images.
Three stocks make up almost 75% of the Roundhill Memory ETF AI software applications require substantial computing power, which is typically delivered by specialized data center chips called graphics processing units (GPUs). High-bandwidth memory (HBM) stores data in a ready state for when GPUs need it, thereby maximizing processing speeds. A low memory capacity would cause bottlenecks by forcing GPUs to pause while they await new information.
Demand for HBM is so strong that many suppliers have cut production of other types of memory to fulfill their lucrative data center orders. This is causing a worldwide shortage of memory across all categories and driving up the prices of consumer electronics like smartphones and computers. In fact, Apple recently announced plans to raise prices on some of its devices due to the soaring cost of memory.
The Roundhill Memory ETF holds just 20 stocks, but its top three positions account for a staggering 74.7% of the portfolio's value.
Stock
Roundhill ETF Portfolio Weighting
Samsung Electronics
25.2%
SK Hynix
24.8%
Micron Technology
24.8%
Data source: Roundhill Investments. Portfolio weightings are accurate as of July 1, 2026, and are subject to change.
Samsung, SK Hynix, and Micron are the world's "big three" in memory. Micron is the only one based in America, whereas the other two are headquartered in South Korea. Nvidia, which makes the best data center GPUs for AI workloads, is sourcing HBM for its new Vera Rubin systems from all three suppliers, underscoring how critical this component is.
Samsung, SK Hynix, and Micron are each manufacturing HBM4 right now, which is designed with a record amount of capacity for AI workloads. Micron's HBM4 offers 60% more capacity than its previous HBM3 solution, with a 20% improvement in energy efficiency. This is a winning combination for data center operators seeking fast processing speeds and low costs.
Outside its top three positions, the Roundhill ETF also holds other popular memory stock holdings, such as Sandisk and Seagate Technology Holdings.
The Roundhill ETF is obliterating the market in 2026 The Roundhill Memory ETF only launched on April 2, so it doesn't have much of a track record for investors to analyze. However, as mentioned, it has already soared by 121%, so it's blowing the doors off the broader market.
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The ETF owes its blistering performance to its top three holdings, which have soared by an average of 133% since it launched. Micron is leading the way, up 177% since April 2.
But investors might want to think twice before rushing out to buy the Roundhill Memory ETF, because I'm not convinced the memory boom is a long-term phenomenon. According to a recent UBS Group survey, around 60% of businesses are beginning to reduce their AI spending by adopting cheaper models that require less computing power. This could impact demand for chips and other components going forward.
Plus, while companies like Micron, Samsung, and SK Hynix can dictate prices right now because of the memory shortage, they are frantically building more manufacturing capacity, so supply will eventually catch up to demand. Prices could crash when that happens, making it very difficult for these companies to grow their earnings, which will almost certainly spark a correction in their stock prices.
As a result, it might be best to steer clear of this particular ETF for now.
Players operating within the Zacks Computer – Integrated Systems industry, including Micron Technology (MU - Free Report) , Seagate Technology (STX - Free Report) , Hewlett Packard (HPE - Free Report) and Agilysys (AGYS - Free Report) , are reaping the benefits of several favorable industry trends like advancements in data management capabilities, a rapid shift away from traditional siloed systems toward more integrated deployment techniques and heightened demand for modern application development approaches. However, the industry is still recovering from significant headwinds stemming from persistent supply chain bottlenecks, a challenging macroeconomic climate characterized by rising inflation and higher interest rates, soaring prices for key inputs and delays in customer acceptance of new products and services. These factors have resulted in significant order backlogs across the industry, casting a shadow on its prospects.
Industry Description The Zacks Computer - Integrated Systems industry comprises companies that deliver advanced information technology solutions spanning computer systems, software platforms, data storage infrastructure and microelectronics. These industry players are ramping up investments in data modernization and analytics, cybersecurity and threat defense, remote work enablement, process automation, contactless service delivery models, enhanced customer and employee experience offerings and supply chain modernization initiatives, which are aimed at accelerating digital transformation services for enterprise customers.
Some players provide technological solutions (products and services) to help organizations connect, interact and transact with customers. Others develop and market information recognition, data entry software, systems and technologies.
4 Computer - Integrated Systems Industry Trends in Focus Integrated Solutions Driving Demand: The industry is experiencing a surge in demand for integrated solutions across enterprises of all scales, driven by increasing investments in cutting-edge software technologies, such as the Internet of Things (IoT), big data analytics, artificial intelligence (AI) and blockchain. Significant opportunities presented by business analytics, cloud computing, mobile technologies, security solutions and social business platforms are tailwinds. Additionally, industry players are anticipated to benefit from the recovering global IT spending, enabling them to capitalize on the rising demand for comprehensive and seamless integrated solutions that can streamline operations and enhance productivity across various sectors.
Solid Adoption of Multi-Cloud Model: The industry is witnessing the robust adoption of the multi-cloud model as enterprises seek to achieve better scalability and optimize resource utilization. This trend is expanding the scope of industry participants, enabling them to leverage the benefits of cloud and hardware/software virtual technologies, which are anticipated to favor the industry's growth. Moreover, as growth and investment opportunities in developed countries continue to slow down, emerging economies are poised to play a crucial role in driving the industry's future. The multi-cloud model's increasing popularity, coupled with the tailwinds from cloud and virtual technologies and the potential of emerging markets, presents a strong foundation for industry participants to capitalize on new opportunities and foster sustained growth.
Supply-Chain Bottlenecks and Backlogs: Industry participants are grappling with a multitude of challenges, including supply constraints, softening demand for servers and cognitive applications, as well as delays in customer acceptance. These factors have contributed to consistent backlog levels, particularly in the Compute, High-Performance Computing & Mass Storage Class and Storage segments. Furthermore, the industry's outlook is affected by the volatility in foreign exchange rates, primarily due to the prevailing macroeconomic scenario and headwinds in emerging markets.
Semiconductor Chip Shortage Mars Prospects: The industry is grappling with the ripple effects of the ongoing semiconductor chip shortage, which has posed significant challenges for participants. The time-consuming business model transition to cloud computing has compounded these difficulties, requiring companies to navigate complex operational shifts amid supply chain disruptions. Moreover, the prospects of industry players are further dampened by lower spending across datacenter systems, primarily due to component shortages, particularly in memory and CPUs, as well as a deceleration in hyperscale spending.
Zacks Industry Rank Indicates Bright Prospects The Zacks Computer – Integrated Systems industry is housed within the broader Zacks Computer and Technology sector. It carries a Zacks Industry Rank #13, which places it in the top 5% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates outperformance in the near term. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
The industry’s position in the top 50% of the Zacks-ranked industries is a result of a positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are optimistic about this group’s earnings growth potential. Since July 30, 2025, the industry’s earnings estimate for 2026 has moved north by 241.5%.
Before we present a few stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry Beats Sector & S&P 500 The Zacks Computer – Integrated Systems industry has outperformed the broader Computer and Technology sector and the Zacks S&P 500 composite in the past year.
The industry has returned 125.8% over this period compared with the S&P 500 and the broader Computer and Technology sector’s respective growth of 22.6% and 33.8%.
One-Year Price Performance
Industry's Current Valuation On the basis of the forward 12-month P/S, which is a commonly used multiple for valuing computer-integrated systems stocks, we see that the industry is currently trading at 6.18X compared with the S&P 500’s 5.03X. It is also below the sector’s forward 12-month P/S of 6.88X.
Over the past five years, the industry has traded as high as 7.08X and as low as 1.94X, with the median being at 3.12X, as the chart below shows.
Forward 12-Month Price-to-Sales (P/S) Ratio
4 Computer-Integrated Systems Providers to Buy Micron Technology is well-positioned for near-term momentum, supported by compelling guidance and a flurry of strategic announcements. For fourth-quarter fiscal 2026, the company has guided revenues of $50.0 billion, with gross margins expanding to approximately 86% and non-GAAP EPS of $31. Executing on 16 multi-year Strategic Customer Agreements — including pacts with Anthropic (June 2026) and General Motors (July 2026) — strengthens revenue durability and visibility. On the product front, HBM4 on 1-beta DRAM technology is in high-volume shipments, while 256GB DDR5 RDIMMs built on 1-gamma technology shipped to key server ecosystem enablers in May 2026. The newly operational Manassas, VA, fab adds critical domestic manufacturing capacity, aligning supply with growing AI-driven demand across data center, automotive and mobile end-markets.
MU currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for its fiscal 2026 earnings has moved north by 26.3% to $73.86 per share in the past 60 days. MU shares have gained 187.4% in the past six-month period.
Price & Consensus: MU
Seagate Technology is favorably positioned for meaningful near-term growth, underpinned by strong fundamentals and management's clear guidance. Fourth-quarter fiscal 2026 revenues are guided at $3.45 billion with non-GAAP EPS of $5, reflecting meaningful sequential improvement over the fiscal third quarter’s $3.11 billion revenues and record 47% non-GAAP gross margin. AI-driven cloud storage demand, supported by Seagate's areal density-led product innovation, is expected to sustain growth into fiscal 2027. In June 2026, Seagate announced early redemption of its 3.50% Exchangeable Senior Notes due 2028, a clear signal of balance sheet confidence. A quarterly dividend of 74 cents, payable July 7, 2026, further underscores capital return discipline. Management targets continued sequential revenue and margin expansion through fiscal 2027, establishing STX as a well-positioned near-term opportunity.
The Zacks Consensus Estimate for this Zacks Rank #1 company’s fiscal 2026 earnings has moved north by 0.3% to $14.93 per share in the past 60 days. STX shares have gained 166.1% in the past six-month period.
Price & Consensus: STX
Hewlett Packard Enterprise presents a compelling near-term investment case. In May 2026, HPE completed the H3C divestiture, generating $1.357 billion in proceeds and sharpening strategic focus. Second-quarter fiscal 2026 results (June 1) showed record revenues of $10.7 billion, up 40% YoY, with non-GAAP EPS of 79 cents and free cash flow of $0.9 billion. HPE raised fiscal 2026 guidance to revenue growth of 29-33%, non-GAAP EPS of $3.35-$3.45, and free cash flow of at least $3.5 billion, each surpassing its fiscal 2028 targets. At HPE Discover Las Vegas (June 15-18), the company unveiled an agentic AI architecture and self-driving networking. Private Cloud AI's multi-node inference for 256 GPUs launches July 2026. Fiscal 2027 guidance projects 8-12% revenue growth and free cash flow exceeding $4.5 billion.
The Zacks Consensus Estimate for this Zacks Rank #1 company’s fiscal 2026 earnings has moved north by 41.5% to $3.41 per share in the past 60 days. HPE shares have returned 83.9% in the past six-month period.
Price & Consensus: HPE
Agilysys presents a compelling near-term investment case underpinned by three converging catalysts. First, the company's May 2026 INSPIRE conference unveiled over 30 AI-powered features built around four strategic pillars — Multi-Modal User Experiences, Hyper-Personalization, Agentic Process Automation and Revenue Intelligence — with early customer deployments expected within 90 days, accelerating product monetization. Second, management's fiscal 2027 guidance targets total revenues of $365-$370 million, subscription revenue growth of at least 30% and adjusted EBITDA margin expansion to 24% from 21.2% in fiscal 2026, reflecting meaningful operating leverage ahead. Third, the cloud-native SaaS model — supported by fiscal 2026 recurring revenues of $205.9 million and annual free cash flow of $68.1 million — ensures durable earnings visibility. Two AI-native modules, Revenue Intelligence and a next-generation CRS, add an incremental near-term upsell opportunity.
The Zacks Consensus Estimate for this Zacks Rank #1 company’s fiscal 2027 earnings has increased by 9.2% to $2.37 per share in the past 60 days. AGYS shares have lost 6.8% in the past six-month period.
Dan Russo takes us through today's Big 3, which includes the S&P 600, arguing it is under owned. He points to opportunity in the Roundhill Mag 7 ETF (MAGS) and Micron (MU), which Dan calls “the heartbeat of the semiconductor.
Micron's (MU +1.45%) stock surged more than 730% over the past 12 months. That rally was driven by its soaring DRAM and NAND memory chip sales for AI-oriented data centers. Micron was once considered a cyclical company that went through "boom and bust" cycles. That perception changed as the AI market expanded and it recently secured over $22 billion in uncancellable, multi-year, fixed-price contracts through 16 Strategic Customer Agreements (SCAs) with data center giants.
From fiscal 2025 (which ended last August) to fiscal 2028, analysts expect Micron's revenue to surge nearly sevenfold as its EPS increases more than 22 times. Those are incredible growth rates for a stock that trades at less than nine times this year's sales and 13 times this year's earnings, so it could still have plenty of upside potential.
Image source: Getty Images.
Micron is still a rock-solid investment, but it's not the only cyclical chipmaker that is evolving into a high-growth AI chipmaker. Another promising stock is Marvell (MRVL +3.22%), which has rallied more than 250% over the past 12 months and still has lots of room to run.
Why is Marvell becoming a high-growth AI chipmaker? In the past, Marvell mainly produced Wi-Fi, Internet of Things (IoT), and mobile chips for consumer devices. But over the past decade, it stopped producing those cyclical, lower-margin chips and expanded its data center with big acquisitions and new product launches.
Today, Marvell generates most of its revenue from its data center business, which produces high-speed optical connectivity chips, custom application-specific integrated circuits (ASICs) for hyperscalers, Ethernet switches, and data processing units (DPUs) that combine CPUs, networking interfaces, and programmable data acceleration engines.
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As the AI market expands, more companies are upgrading their data centers with Marvell's hardware to handle the latest AI applications. Nvidia (NVDA +0.66%) also invested $2 billion in Marvell earlier this year and more tightly integrated its own GPUs, CPUs, and DPUs with Marvell's custom AI accelerators and networking chips through its NVLink platform. It's also co-developing advanced optical interconnect and silicon photonics solutions with Nvidia to eliminate data-transfer bottlenecks in cloud and AI data centers.
How much higher can Marvell's stock soar? From fiscal 2026 (which ended this January) to fiscal 2029, analysts expect Marvell's revenue and adjusted EBITDA to grow at CAGRs of 41% and 43%, respectively. It might seem a bit pricey at 19 times this year's sales and 50 times its adjusted EBITDA, but its long-term growth potential justifies those higher valuations. So if you're looking for an oft-overlooked AI chipmaker that could replicate Micron's massive rally, Marvell might fit the bill.
Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Marvell Technology, Micron Technology, and Nvidia. The Motley Fool has a disclosure policy.
DRAM makers have arguably been the in the hottest corner of the semi trade so far this year, and while a wave of increased volatility has made the names tough to buy on weakness, there is a great debate surrounding whether or not DRAM is experiencing structural demand as AI compute demands continues going off the charts with new applications (many of which may be highly monetizable) coming online in the coming months and quarters, all while firms look to get their orders in way in advance.
Micron Technologies (MU +3.26%) blew away expectations with its most recent earnings report. The company posted record profitability while quintupling revenue year over year.
But perhaps the biggest takeaway from Micron's earnings report was management's disclosure of new strategic customer agreements (SCAs). Micron signed long-term agreements with some of its largest customers, creating more predictable demand and pricing for its chips over the next three to five years.
That's important because Micron's biggest competitors, SK Hynix (KOSE: A000660) and Samsung (SSNLF +0.00%), are about to invest huge sums of money in building out additional capacity. It'll be a major test for Micron's new strategy.
Image source: Micron Technologies.
Micron's biggest risk Memory chips are, in practicality, commodities. The market has seen a surge in demand over the past year as memory has become a bottleneck in artificial intelligence (AI) training and inference. The more memory you can package with a GPU or other AI accelerator chip, the faster it can process data and generate a response.
However, it takes time for Micron and its competitors to build new capacity. As a result, memory chip prices have skyrocketed, leading to massive near-term profits for the chipmakers.
But as new fabs begin producing more chips, the supply-and-demand equilibrium shifts, and prices and profits decline. This creates earnings cycles throughout the industry. The big risk for Micron is that SK Hynix and Samsung build out more supply than Micron does, putting pressure on pricing and leaving Micron with less volume to make up the difference.
Micron's latest solution to the challenge is its SCAs. So far, it's signed 16 customers, representing about 20% of its DRAM volume and one-third of its NAND volume. The contracts are take-or-pay, which gives Micron more revenue predictability and the confidence to build more capacity. Micron says the contracts represent a minimum value of $100 billion over the course of the agreements.
Last year, Micron announced plans to spend $200 billion on new production capacity and R&D. Despite the SCAs, Micron's management didn't announce any plans to spend more. It merely stated they "provide us greater confidence in our capex (capital expenditures) and R&D (research and development) investments."
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The competition just announced massive spending plans The South Korean government recently announced a joint initiative between SK Hynix and Samsung to build a massive facility in southwestern South Korea. The facility will include four new chip fabrication plants with a total cost of about $520 billion. Separately, another $53 billion is being allocated to a new chip packaging facility.
And reports indicate that SK Hynix and Samsung plan to spend a combined 2,000 trillion won (about $1.3 trillion) on new facilities over the next decade. So, the new fabs and packaging plant may be just the start.
As mentioned, it takes years for a new facility to start producing chips, so the impact of the massive spending plans on chip pricing will be delayed. However, with a new pipeline for memory chips set to enter the market by the end of the decade, it could severely limit Micron's ability to negotiate its SCAs. And that could have a meaningful impact on its business going forward.
As things stand, Micron's current agreements account for just a minority of its revenue. The agreements cap the upside at pricing levels from its second quarter, limiting its near-term earnings potential. However, Micron's management expects supply constraints to continue benefiting pricing through 2027.
With the massive capacity build-out set to influence pricing by the end of the decade, Micron's earnings downcycle could be quite severe despite its best efforts to protect itself with long-term agreements. As such, Micron investors should be wary of paying too much for near-term earnings potential.
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That's what the Zacks Focus List offers. It's a portfolio of 50 stocks that serve as a starting point for long-term investors to build their individual portfolios. The stocks included in the list are set to outperform the market over the next 12 months.
One thing that makes the Focus List even more advantageous is that each pick comes with a full Zacks Analyst Report. This helps explain why each stock was selected and why we believe it's a good pick for the long-term.
The portfolio's past performance only solidifies why investors should consider it as a starting point. For 2020, the Focus List gained 13.85% on an annualized basis compared to the S&P 500's return of 9.38%. Cumulatively, the portfolio has returned 2,519.23% while the S&P returned 854.95%. Returns are for the period of February 1, 1996 to March 31, 2021.
Focus List MethodologyWhen stocks are picked for the Focus List, it reflects our enduring reliance on the power of earnings estimate revisions.
Earnings estimates, or expectations of growth and profitability, come from brokerage analysts who track publicly traded companies; these analysts work together with company management to analyze every aspect that may affect future earnings, like interest rates, the economy, and sector and industry optimism.
What a company will earn down the road also needs to be taken into consideration, and this is why earnings estimate revisions are so important.
The stocks that receive positive changes to earnings estimates are more likely to receive even more upward changes in the future. Take this example: if an analyst raised their estimates last month, they'll probably do so again this month, and other analysts will follow.
Utilizing the power of earnings estimate revisions is when the Zacks Rank joins the party. A unique, proprietary stock-rating model, the Zacks Rank uses changes to quarterly earnings expectations to help investors create a winning portfolio.
The Zacks Rank consists of four main pillars: Agreement, Magnitude, Upside, and Surprise. Each one is given a raw score, which is recalculated every night and compiled into the Rank. Then, stocks are classified into five groups, ranging from "Strong Buy" to "Strong Sell," using this data.
The Focus List is comprised of stocks hand-picked from a long list of #1 (Strong Buy) or #2 (Buy) ranked companies, meaning that each new addition boasts a bullish earnings consensus among analysts.
Since stock prices respond to revisions, it can be very profitable to buy stocks with rising earnings estimates. By buying Focus List stocks, then, you're likely getting into companies whose future earnings estimates will be raised, potentially leading to price momentum.
Focus List Spotlight: Micron (MU - Free Report) Micron Technology, Inc., headquartered in Idaho, has established itself as one of the leading worldwide providers of semiconductor memory solutions.
On December 27, 2016, MU was added to the Focus List at $23.26 per share. Shares have increased 4094.15% to $975.56 since then, and the company is a #1 (Strong Buy) on the Zacks Rank.
For fiscal 2026, 12 analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $15.38 to $73.86. MU boasts an average earnings surprise of 21.1%.
Moreover, analysts are expecting MU's earnings to grow 791% for the current fiscal year.
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Semiconductor stocks were in the green on Monday, but Morgan Stanley says recent weakness in the category suggests investors are increasingly looking beyond chipmakers and toward a broader set of beneficiaries from the artificial intelligence boom.
In a note released on Monday, the brokerage said the recent weakness in US semiconductor shares suggests market leadership is broadening.
It added that hyperscalers — large technology companies investing heavily in artificial intelligence infrastructure and data centres — are well positioned to outperform as the market rotates away from semiconductor names.
The group of hyperscalers includes companies such as Microsoft, Amazon and Meta Platforms, all of which have committed billions of dollars to expanding AI infrastructure.
"We also believe this cohort possesses attractive optionality within the AI ecosystem: strong core businesses, the ability to participate in/lead the agentic application layer development and implementation, as well as an underappreciated cost-cutting lever," the strategists said.
Although these technology giants have sharply increased capital expenditure to support AI development, investors continue to debate whether AI-powered products will generate sufficient returns to justify the spending.
Morgan Stanley, however, said there could be "more capex discipline in the near-term" and argued that hyperscaler stocks have already endured a period of underperformance.
Despite the note, chip stocks were up on Monday, with Micron up by over 4.1%, AMD up by over 9.4%, Nvidia up by about 0.6%, and Marvell Technology up by 5.1%.
The brokerage's comments come after semiconductor stocks significantly outperformed the broader technology sector over recent months.
While Alphabet, Amazon, Meta Platforms and several other hyperscalers faced heavy selling in June, the Philadelphia Semiconductor Index climbed 11% during the month.
However, sentiment has shifted in recent weeks.
The Philadelphia Semiconductor Index has now fallen nearly 14% from its record high reached last month as investors grow increasingly concerned about stretched valuations.
Even after the pullback, the index remains about 123% higher since September, highlighting the scale of the rally that has been driven by surging demand for AI chips and data-centre hardware.
Over the same period, a UBS basket tracking hyperscaler stocks has declined 2%.
Morgan Stanley believes this changing performance reflects a natural rotation within the AI investment theme rather than a collapse in enthusiasm for artificial intelligence.
The brokerage also expects the market rotation to extend beyond technology.
Wilson said easing expectations for additional Federal Reserve interest-rate hikes, combined with declining crude oil prices, should provide support for consumer discretionary companies, transport stocks and biotechnology firms.
The strategists nevertheless warned that the semiconductor pullback could create greater volatility across equities because many of the largest chip companies have become key drivers of broader market performance.
While they described the recent weakness as part of the alternating leadership seen among AI-related sectors over the past two years, they cautioned that investors should expect a "choppy/weaker equity market overall."
Wilson maintained a year-end target of 8,000 for the S&P 500, implying roughly 7% upside from current levels.
Earlier this year, he correctly predicted that US equities would look past geopolitical tensions as strong corporate earnings continued to support valuations.
Morgan Stanley's outlook echoes views expressed by other Wall Street strategists.
JPMorgan strategist Mislav Matejka has also argued that the second half of the year is likely to see market leadership broaden beyond technology.
"AI is unlikely to be the only story in town," Matejka wrote in a recent note.
HomeIndustriesComputers/ElectronicsTech StocksTech StocksInvestors are looking forward to Samsung’s earnings and SK Hynix’s U.S. listing, experts sayJuly 6, 2026, 11:11 a.m. ET
Shares of Micron Technology and other chip names were on the rise Monday morning, rebounding after a tough stretch last week.
Shares of storage makers Western Digital WDC and Seagate Technology STX were up more than 10% and 7%, respectively, Monday morning, while shares of memory players Micron MU and Sandisk SNDK were up more than 3% and 4%, respectively.
The AI infrastructure boom has rewritten the rules of the semiconductor industry. Over the past 18 months, memory chips transformed from commodity products into one of the world’s most valuable bottlenecks.
High-bandwidth memory (HBM), DRAM, and enterprise NAND became indispensable for Nvidia‘s (NASDAQ:NVDA | NVDA Price Prediction) AI accelerators, sending memory manufacturers into one of their strongest upcycles in years. Investors rewarded companies like Micron Technology (NASDAQ:MU), Sandisk (NASDAQ:SNDK), and others with enormous gains as prices climbed quarter after quarter. But every semiconductor boom eventually collides with new supply.
Now one prominent analyst believes that moment has arrived — and it happens to align with billionaire investor Michael Burry’s contrarian bet against Micron.
Analyst Says the Shortage Already Peaked Burry surprised many investors after revealing a sizable short position against Micron, betting the market had become too optimistic about memory demand. In my view, the trade looks premature. Micron repeatedly told investors during earnings calls that AI demand remained unprecedented, while industry reports showed HBM production largely committed through 2026.
Now Bloomberg Intelligence argues Burry may have been looking further ahead than most investors.
According to Shuli Ren, a former investment banker, wrote an article for the investment research service saying the global memory shortage likely peaked during the second quarter of 2026. Her research forecasts conditions easing through the second half of 2026 and into 2027 before the industry potentially swings into oversupply by 2028.
That would be classic semiconductor economics — high prices encourage capacity expansion, which eventually creates too much supply and falling margins. If memory pricing reverses, earnings estimates across the sector would likely follow.
Second, hyperscalers may not continue buying AI hardware at today’s pace forever. Once Microsoft (NASDAQ:MSFT), Meta Platforms (NASDAQ:META), Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOG), and others complete much of their initial infrastructure buildout, purchasing could normalize instead of accelerating every quarter.
Third, AI hardware demand may shift from shortages to efficiency. Newer chips continue delivering more performance per watt and per dollar, meaning future systems could require fewer memory components for the same computing output.
If those trends overlap, memory pricing could weaken long before investors expect.
Bull Case Still Looks Strong Granted, the bearish argument rests on one critical assumption — that demand slows faster than supply expands. That remains far from certain.
Industry executives continue describing memory as AI’s biggest bottleneck. Earlier this year, OpenAI Chief Operating Officer Brad Lightcap identified memory — not GPUs — as the industry’s primary constraint. Intel (NASDAQ:INTC) CEO Lip-Bu Tan similarly warned shortages could persist well into 2028.
Demand also continues broadening beyond AI training. AI inference, enterprise storage, sovereign AI projects, robotics, autonomous vehicles, and edge computing all require increasing amounts of memory.
Even if hyperscaler capital spending moderates, entirely new customers could absorb much of the additional capacity. That is important because semiconductor cycles often end when end-market demand disappears. Today’s AI demand appears to be diversifying instead.
Key Takeaway In short, Michael Burry may ultimately prove correct that today’s extraordinary memory pricing cannot last forever. Semiconductor history suggests every shortage eventually becomes an oversupply.
The stronger argument, however, is that the timeline remains uncertain. Bloomberg Intelligence makes a compelling case that supply growth will catch demand by 2028, but today’s AI infrastructure buildout still appears to be in its early innings, and multiple industry leaders continue warning that memory remains the limiting factor. Investors should probably expect pricing to cool rather than collapse.
For shareholders, that means treating memory stocks less like permanent growth stories and more like cyclical businesses riding an unusually powerful AI wave. The boom will eventually fade. The evidence suggests it simply may not be over yet.
Micron Technology Inc (NASDAQ:MU) and Ford Motor Company (NYSE:F) have entered into a long-term Strategic Customer Agreement aimed at strengthening the supply of memory and storage solutions for Ford’s future vehicle production, the companies said.
The agreement is designed to support Ford’s next-generation vehicle programs by securing a more stable supply of high-performance automotive memory and storage products, which are increasingly critical as vehicles become more software-driven and data-intensive.
Micron said it is expanding output of key automotive memory solutions and increasing manufacturing capacity to support long product lifecycles and sustained demand from automotive customers. The company noted that these investments are part of broader efforts to scale supply in line with global demand for memory and storage, while also supporting the wider automotive supply chain.
As part of its manufacturing strategy, Micron highlighted ongoing investments in US production, including expanded DRAM output at its Manassas, Virginia facility.
Ford CEO Jim Farley said the agreement supports the company’s efforts to build vehicles in the United States with a more resilient supply chain.
“Producing the high-volume vehicles of the future in the US will require a resilient supply chain,” Farley said, adding that Ford welcomes Micron’s expansion of domestic manufacturing and workforce investment.
Micron CEO Sanjay Mehrotra said the collaboration reflects growing demand for advanced memory in modern vehicles.
“As vehicles become more intelligent and data-intensive, the importance of advanced memory and storage continues to grow,” Mehrotra said, adding that long-term supply agreements and manufacturing investment are key to supporting Ford’s future production needs.
Shares of Micron added 3% on the announcement, while Ford shares were up 2%.
NEW YORK--(BUSINESS WIRE)---- $MU #NASDAQ--Scott+Scott Attorneys at Law LLP has launched an urgent investigation into whether certain officers and directors of Micron Technology, Inc. (NASDAQ: MU) failed to manage Micron in an acceptable manner, breaching their fiduciary duties to Micron, and whether Micron and its shareholders have suffered damages as a result. Attorney Joseph A. Pettigrew is heading the investigation—what shareholders need to know:On June 25, 2026, a consumer class action complaint was filed.
Roughly three decades ago, the advent and mainstream proliferation of the internet changed the global growth trajectory forever. Since then, investors have waited, often impatiently, for the next technological leap forward to take shape. The evolution of artificial intelligence (AI) is that long-awaited leap.
Enabling software and systems to make autonomous, split-second decisions is a $15.7 trillion global opportunity, according to PwC analysts. But while graphics processing unit (GPU) goliath Nvidia is often viewed as the foundation of the AI infrastructure build-out, it's arguably been dethroned by Micron Technology (MU +2.52%).
Shares of Micron have rallied nearly 700% over the trailing year, and 1,850% since the start of 2023 (i.e., when AI stocks really began to take off). But according to one Wall Street analyst, the good times are just getting started.
Image source: Getty Images.
Micron can vault to a $2.5 trillion valuation Although Wall Street analysts have been adjusting their price targets on Micron at a breakneck pace this year, few have been tripping over themselves to boost estimates quite like Ben Reitzes at Melius Research.
Over a two-month stretch, Retizes initiated coverage with a $700 price target (April 27), increased his firm's price target to $1,100 (May 18), and doubled it again to $2,200 (June 25). A $2,200 price target implies a nearly $2.5 trillion market cap and upside of 126% from where shares closed on July 2. This would make Micron larger than Taiwan Semiconductor Manufacturing, Space Exploration Technologies (SpaceX), and Broadcom, among others.
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The overwhelming optimism surrounding Wall Street's newest trillion-dollar company primarily involves its AI ties. Micron is a key supplier, and the sole major U.S.-based manufacturer, of memory solutions (NAND flash, DRAM, and high-bandwidth memory (HBM)) used in AI-accelerated data centers. HBM is stacked with GPUs to facilitate the ultra-fast transfer speeds needed to train large language models and make split-second decisions in AI data centers.
The same week that Reitzes raised Melius Research's price target on Micron to $2,200 is when the company announced it had secured around $100 billion in strategic long-term agreements for memory solutions. With demand for memory solutions handily outstripping supply, Micron is enjoying otherworldly pricing power.
Image source: Getty Images.
When things seem too perfect, they often are There's little question that Micron is firing on all cylinders at the moment and has been rewarded for doing so. Its long-term agreements and the persistent shortage of physical memory solutions should remove some of the cyclicality that's hampered memory companies for decades.
But 28 years of investing on Wall Street has taught me that when things seem too perfect, they often are.
Although Micron's bottom line is protected from a sales shortfall for the foreseeable future, it's important to recognize that no game-changing technology over the last three decades has escaped an early innings bubble-bursting event.
-- Geiger Capital (@Geiger_Capital) May 8, 2026 Stock market bubbles form because investors consistently overestimate the adoption and/or optimization of new technologies. While adoption hasn't been an issue, as evidenced by the demand for Micron's HBM, we're likely several years away from businesses optimizing these solutions to boost sales and profits. Don't forget that it took more than half a decade for businesses to optimize the internet, which occurred after the dot-com bubble burst.
Though Micron's forward price-to-earnings ratio remains fundamentally appealing, historical precedent points to a rough road ahead as AI matures.
Sean Williams has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Broadcom, Micron Technology, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
1. SK Hynix Enters the U.S. Chip Race South Korean chipmaker SK Hynix is set to raise around $28 billion by launching a U.S. listing today, regulatory filings show. Each of the expected 17.79 million ADRs will represent a tenth of a common share. The move opens SK Hynix to American investors chasing soaring demand for memory chips and other semiconductors used in AI.
"It's a good time to go and get the U.S. involved in your shares": Daniel Morgan at Synovus Trust noted the value of the opportunity, as American investors found its Korea-only shares hard to buy – and it lets SK Hynix trade alongside rival Micron (MU +2.16%), potentially closing a valuation gap. Team Rule Breakers' recommendation Micron up around 2% in pre-market trading: In a new $9.3 billion development, Micron broke ground on a Hiroshima cleanroom expansion on July 4, adding advanced-memory capacity for AI workloads. Management said equipment shipments should begin in 2028. 2. Sell-Offs Are the Toll, Not the Trap Tech stocks once again drove markets higher last week, pushing the S&P 500 up 1.8% by Thursday's close, with the Nasdaq gaining 2.1%. Despite some jitters creeping back in as tech stocks fell back ahead of Friday's market closure for the July 4 weekend, Nasdaq futures rose around 1% in pre-market trading today, with S&P 500 futures up 0.4%.
WTI crude drops below $69 per barrel: Oil prices continue to fall with the Strait of Hormuz open, as the uneasy truce between the U.S. and Iran continues. The OPEC+ group of producers, meanwhile, agreed another modest production rise for next month. "Dancing with the devil in the pale moon light": A post from Michael Burry on X echoed The Joker as he continued his bearish take on the AI stock boom, adding, "The AI narrative is nothing more than mass addiction." Less theatrically, Bank of America (BAC +1.86%) analysts said, "Our bear market signposts suggest speculation is hitting extreme levels," and predicted a 5% drop for the S&P 500 by the end of the year.
3. Earnings to Watch in a Quiet Week
AZZ (AZZ +1.01%) – recommended by Team Hidden Gems – will report its first quarter of fiscal 2027 after Wednesday's market close. The metal coatings and industrial infrastructure specialist reported a 4.6% rise in total full-year sales across fiscal 2026, with adjusted net income up 19.3% year over year (YoY). PepsiCo (PEP 1.66%) releases Q2 earnings Thursday morning, following a 9% YoY rise in Q1 non-GAAP core EPS, from an 8.5% revenue increase. Investors should get some insight into cautious consumer spending, as the company navigates rising input cost pressures. Delta Air Lines (DAL +1.09%) posts Q2 results Friday, as we enter a "rare airline sweet spot" for major carriers, in the words of Bank of America analysts – high ticket prices and falling fuel costs. Q1 marked a record quarter for revenue with a 9.4% YoY rise, as non-GAAP EPS jumped 42%. 4. Today's Take: When One Is All You Need
Ferrari (RACE +0.13%) sells one thing: ultra-luxury sports cars. Because it owns that lane so completely, it commands years-long waiting lists and margins that make most businesses envious. That's not a vulnerability; that's a moat.-- Yasser El-Shimy Team Rule Breakers
5. Your Take What's your take on companies that grow through acquisition ("roll-ups")? What separates a skillful acquirer that creates value from one that's just buying growth?
Debate with friends and family, or become a member to hear what your fellow Fools are saying!
This image and article was created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. Bank of America is an advertising partner of Motley Fool Money. The Motley Fool has positions in and recommends Azz, Ferrari, and Micron Technology. The Motley Fool recommends Delta Air Lines. The Motley Fool has a disclosure policy.
BOISE, Idaho, July 06, 2026 (GLOBE NEWSWIRE) -- Micron Technology, Inc. (Nasdaq: MU) and Ford Motor Company today announced a long-term Strategic Customer Agreement (SCA) to strengthen the supply of memory and storage solutions supporting Ford’s next-generation vehicle production.
Micron is increasing output of key automotive memory solutions with capacity expansions designed to support long product lifecycles and ensure sustained supply for critical production programs. These investments are part of Micron’s broader efforts to scale supply responsibly in line with accelerating global demand for memory and storage, supporting the broader automotive ecosystem and strengthening critical U.S. infrastructure.
This agreement is supported by Micron’s ongoing investments to expand and localize manufacturing for automotive customers, including its expansion of advanced DRAM production at its Manassas, Virginia fab.
“Producing the high-volume vehicles of the future in the U.S. will require a resilient supply chain,” said Jim Farley, President and CEO of Ford Motor Company. “We applaud Micron’s commitment to manufacturing in America, expanding its domestic production and investing in a skilled workforce.”
“We are proud to extend our collaboration with Ford to help ensure a reliable, long-term supply of memory and storage solutions,” said Sanjay Mehrotra, Chairman, President and CEO of Micron Technology. “As vehicles become more intelligent and data-intensive, the importance of advanced memory and storage continues to grow, making collaboration and long-term supply increasingly important. Through supply assurance, deep technology collaboration, and continued investment in manufacturing capacity, we are helping enable consistent, long-term support for Ford’s next-generation vehicle production as demand for advanced memory continues to grow.”
This SCA is one of the 16 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, 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.
Forward-Looking Statements
This press release contains forward-looking statements, including statements regarding the anticipated benefits of the Micron-Ford 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.
The stock market has continued to perform well in 2026, despite seemingly high valuations for many stocks entering this year. As of the end of June, the S&P 500, which features the top 500 stocks on U.S. markets, was up 9% since the beginning of the year. And since 2023, it has now risen by 95%.
This year, tech stocks have once again dominated, with a heavy focus on memory and storage providers. The three best-performing stocks on the S&P 500 as of the halfway mark of 2026 were Sandisk (SNDK +3.55%), Micron Technology (MU +2.52%), and Intel (INTC +4.78%). Here's a look at how much they were up as of the halfway mark, and if they can still rise much higher in the second half.
Image source: Getty Images.
Sandisk Shares of Sandisk were up a monstrous 858% as of the end of June, easily making it the hottest stock to own on the S&P 500. There's no mystery behind its success as Sandisk has been benefiting from incredible demand for the memory and storage products that it sells. Its valuation may also make it look enticing to tech investors, as it has a market cap of around $260 billion, which may not seem all that big compared to the big players in tech.
But while the business has been doing well, there has been some apprehension of late. The stock fell last week, perhaps due to concerns about its high valuation (it trades at around 60 times trailing earnings) and fears that, while there is a shortage of memory and storage products in the market right now, that shortage may inevitably end in the long run. And when that happens, Sandisk's stock could be due for a correction.
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The company has been doing exceedingly well, but the question is whether this kind of performance is sustainable. In its most recent quarter, which ended on April 3, the company's revenue rose by 251%, and its gross profit margin was 78%, which was a huge improvement from just 23% in the same period a year ago.
Sandisk's stock may still rise if demand for memory remains strong, but I also believe that it may run out of room to rise a whole lot higher, given how much future growth is already priced in to its hefty valuation; it may be approaching a peak, if it hasn't already hit one.
Micron Technology Another red-hot memory stock this year has been Micron Technology, whose valuation crossed the trillion-dollar mark amid its rally during the first six months. At the halfway mark, the stock was up just over 300%. While that's far behind Sandisk, it's a tremendous performance nonetheless.
At a $1.1 trillion valuation, Micron is now among the most valuable companies in the world, due to the robust demand in the tech sector for its memory and storage products. While it's similar to Sandisk, Micron's focus is on DRAM and high-bandwidth memory that's crucial for data centers. Thus, it's been a hot play related to the artificial intelligence (AI) revolution and the massive build-out taking place in the tech sector. It, too, is benefiting from higher prices and demand, enabling it to grow its top and bottom lines at impressive levels.
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The expected growth is a big reason investors remain bullish on Micron; its forward price-to-earnings (P/E) multiple is just six, which is based on analyst expectations of how strong the company's earnings will be in the year ahead. For investors who remain optimistic about the future and AI spending continuing at high levels, a bullish case can be made for why Micron can continue to soar. But as with Sandisk, there has been some pullback recently as many investors have also begun to think twice about the stock.
I wouldn't be surprised if Micron's rally continues in the latter part of the year, but it may be running out of room to rise much higher given how hot it's been.
Intel At around 280%, Intel's gains were slightly behind Micron at the halfway mark. Intel has struggled in the past, but investments from both Nvidia and the U.S. government have inspired many investors, giving them confidence that the business is on the right track.
While Intel continues to struggle with profitability, that hasn't weighed down the stock; during the first three months of the year, Intel incurred a net loss of $4.3 billion, largely a result of restructuring and other expenses. Meanwhile, the 16% revenue growth in its foundry business proved to be a positive catalyst for the stock.
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At more than $600 billion in market cap, Intel's business has become significantly more valuable than it was a year ago, when its valuation was below $100 billion. But even based on analyst expectations of future growth, the stock is extremely pricey; it trades at a forward P/E multiple of 137. Intel could be due for a pullback in the second half.
Micron Technology and Ford Motor on Monday signed a long-term agreement to secure the supply for memory and storage platforms used in the automaker's next-generation vehicle production.
Micron stock price has plunged and entered a local bear market after falling by over 22% from its all-time high. It slipped to $975 on Thursday, its lowest level since June 11, after a series of negative news.
Micron Technology (NASDAQ: MU) is set to pay its next quarterly dividend later this month, with eligible shareholders scheduled to receive $0.15 per share on July 21, 2026.
The dividend remains unchanged from the company’s previous quarterly distribution, reflecting a consistent payout policy despite Micron’s strong share price performance over the past year.
Based on its annualized dividend of $0.60 per share, the stock offers a dividend yield of approximately 0.06% based on its last closing price of $975.56.
Investors holding 100 Micron shares will receive $15 before applicable taxes from the upcoming payment.
MU stock dividend payment schedule. Source: Dividend.com Assuming the company maintains its current quarterly dividend of $0.15 per share, shareholders with 100 shares would earn $60 in annual dividend income before taxes.
To qualify for the July payment, investors had to own Micron shares before the July 6, 2026, ex-dividend date. Shares purchased on or after the ex-dividend date are not eligible for this dividend.
While Micron’s dividend yield remains relatively modest, the company’s investment case continues to be driven primarily by capital appreciation rather than income.
Micron’s impressive 2026 run The semiconductor giant has been one of the best-performing large-cap stocks over the past year as demand for artificial intelligence memory chips continues to accelerate.
Shares have surged more than 700% over the past 12 months and approximately 242% year-to-date, pushing Micron’s market capitalization above $1.1 trillion despite a recent pullback.
MU one-year stock price chart. Source: Finbold The company recently reported record fiscal third-quarter results, with revenue climbing to $41.46 billion, driven by booming demand for high-bandwidth memory (HBM) used in AI accelerators.
Micron also issued strong guidance for the current quarter, forecasting revenue of around $50 billion at the midpoint.
Demand for AI memory remains the company’s key growth driver, with Micron reporting that its HBM production capacity is fully booked through 2026 under long-term supply agreements.
At the same time, Wall Street remains overwhelmingly bullish on Micron’s long-term prospects as AI infrastructure spending continues to expand.
Although the dividend provides a modest stream of recurring income, Micron remains a growth-oriented technology stock, with most investor returns expected to come from earnings growth and potential share price appreciation rather than dividend income.
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SummaryMicron Technology is a 'Strong Buy' under $1,000, driven by robust AI data center demand and a three-company oligopoly memory market (along with Samsung and SK Hynix).MU's Q3FY26 saw revenue up 346% YoY, a record 85% gross margin, and $18.3 billion adjusted free cash flow, with similar strength guided for Q4.Strategic multi-year customer agreements guarantee ~$100 billion in revenue (backed by ~$22 billion in customer deposits), enhancing financial visibility and justifying a higher valuation multiple.Valuation remains compelling at a forward P/E of only 13.3x, with a potential 10:1 stock split and durable AI-driven memory demand into 2029-2030.Micron Technology's Silicon Valley Office
JHVEPhoto/iStock Editorial via Getty Images
Last Thursday I bought a starter position in shares of Micron Technology (MU) at $970 and change. I did so for a number of reasons, starting with the fact that shares were
23.37K Followers
Analyst’s Disclosure: I/we have a beneficial long position in the shares of AVGO, GOOG, NVDA, SMH, MU, XOM, CVX 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.
I am an electronics engineer, not a CFA. The information and data presented in this article were obtained from company documents and/or sources believed to be reliable, but have not been independently verified. Therefore, the author cannot guarantee their accuracy. Please do your own research and contact a qualified investment advisor. I am not responsible for the investment decisions you make.
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 Technology shares are up 242% this year coming into Monday's session. (Courtesy Micron)
Micron Technology and its memory-chip peers have suffered a small dent in the past week, after racking up huge gains in recent months. That’s a chance to get in on the memory surge, according to UBS analyst Nicolas Gaudois.
SummaryOn Wednesday, June 24, Micron Technology reported what could only be described as a blowout fiscal Q3 ’26, as revenue, operating income and EPS materially exceeded Street consensus.Capex is especially crucial to Micron as it is to all capital-intensive industries. The company guided fiscal Q4 ’26 capex to $10 billion, versus the $7.8 billion in Q3 ’26, which would put full-year capex close to $30 billion.Management guided to free cash flow in Q4 ’26 to “increase substantially again”. Sundry Photography/iStock Editorial via Getty Images
On Wednesday, June 24th, after the market closed, Micron Technology (MU) reported what could only be described as a blowout fiscal Q3 ’26, as revenue, operating income and EPS materially exceeded Street consensus.
Sandisk (SNDK 14.00%) and Micron Technology (MU 5.68%) were the two top-performing stocks in the S&P 500 (^GSPC +0.00%) to date. Sandisk is by far leading the way, rising over 600% so far this year. Micron is a long way behind but still up around 240%. No matter how you slice it, that's an impressive run and leaves many investors disappointed they didn't hop in earlier.
However, nobody can time-travel back to the start of 2026 and buy shares of these two. Instead, investors can only start now and predict what's ahead. So, can Sandisk and Micron continue their unprecedented rise through 2027? Let's take a look.
Image source: Getty Images.
The memory chip market is still tight Sandisk and Micron operate in the memory chip market. Sandisk makes NAND memory, which is typically used for long-term data storage. Micron makes both NAND and DRAM, with DRAM used alongside computing devices like graphics processing units (GPUs) for ultrafast memory access, ensuring these units have instant access to the information they need.
While most components that go into data centers have had the capacity to ramp up to meet demand, the memory portion of components that go into data centers has not. With soaring demand and insufficient capacity, prices have spiked for memory components. This has led to phenomenal revenue growth for both Micron and Sandisk.
SNDK Revenue (Quarterly YoY Growth) data by YCharts.
However, that's just one part of the equation. Neither Sandisk nor Micron had to change its current setup to generate more revenue, so their margins have also skyrocketed to new highs.
SNDK Profit Margin (Quarterly) data by YCharts.
The one-two punch of soaring revenue and spiking margins has created a recipe for soaring stocks, but there's one more catalyst that caused these two to skyrocket. About a year ago, nobody expected there to be a shortage in memory chips. These two also had low margins and low growth at that time, and not a whole lot was expected of them. As a result, they traded at a dirt-cheap valuation.
SNDK PE Ratio (Forward) data by YCharts.
However, as all of the catalysts have hit throughout the year, a combination of cheap stock prices, soaring revenue, and rising margins has created the ultimate recipe for legitimate stock price appreciation. Neither Micron nor Sandisk is in a bubble, and the market conditions that created their soaring stock prices make sense. But what about the future?
There could be several years of strong growth ahead What investors are most concerned about is the memory chip market reverting to conditions in 2025, when memory was fairly low-priced and margins were weak. That would destroy everything these two stocks have earned over the past year and make them poor investments moving forward.
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However, there are still a few years left in this cycle.
Micron recently reported quarterly earnings, and its management team informed investors that they see "tight market conditions" persisting beyond 2027. That bodes well for the short-term prospects of these two, but beyond that, it's too hard to predict because nearly every memory chip producer will have new capacity online by then. Whether that is enough to meet AI memory demand remains to be seen, but until then, Sandisk's and Micron's stocks look primed to continue rising.
If you have a good risk tolerance and can monitor the memory chip market from time to time, I think these two can remain worthy investments moving forward. However, if you're a set-it-and-forget-it investor, these two may not be right, as market conditions could shift at a moment's notice, causing stock prices to soar or spike.
The top three performing stocks in the S&P 500 (^GSPC +0.00%) for the first half of 2026 were Sandisk (SNDK 14.00%), Micron (MU 5.68%), and Intel (INTC 5.25%), in that order. Although the market had a weak day on July 1, at the end of the first half of 2026 on June 30, Sandisk was up about 860%, Micron was up roughly 304%, and Intel was a bit less, at 278%. Regardless, those are incredible six-month returns, and any investor would be happy to have owned them.
However, the first half of 2026 is over, and investors can't go back and take a position in these stellar stocks. Instead, we must look forward and determine whether these stocks have had their run and it's time to sell, or if they can continue their momentum throughout the rest of 2026. Let's take a look at all three and determine which has the best chance at going higher in the second half of 2026.
Image source: Getty Images.
What caused each stock to rise so much in 2026? First, let's take a look at why these stocks rose so much. That will help determine if there's more room ahead or if the catalyst has played out.
Both Micron and Sandisk operate in the memory chip market. This has been a great industry to be involved in, as a lack of memory chips has caused prices to skyrocket, boosting Sandisk's and Micron's revenue and profits. The artificial intelligence (AI) data center build-out is the cause of the shortage. With several projections pointing toward 2030 as the year when data center build-outs may slow, the future looks bright for these two stocks. Micron recently reported earnings and told investors that it expects the memory chip market to stay "tight" beyond 2027, so the near future is secure for these two stocks.
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Intel is also somewhat involved in the AI data center build-out, although to a far lesser degree than Micron, Sandisk, and some of its peers. The reality is that Intel fell behind other competitors in the chip foundry realm, and that side of its business has been struggling. However, after key investments from the U.S. government and others, Intel may have turned the corner, with its biggest breakthrough yet coming just a few weeks ago. President Donald Trump announced that Apple had reached a deal to use Intel as a second chip supplier, which would be a huge customer win for Intel. That shows signs of a turnaround for Intel, but does that make it a great stock to buy now?
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Some of these stocks are still cheap despite their run-up After major runs like these three have gone on, investors must take a look at valuation to see if these stocks have gotten unreasonably rich after their big run-up. With how fast Micron and Sandisk are growing, using the forward price-to-earnings (P/E) ratio is a great way to value the stocks.
From this standpoint, Intel looks greatly overvalued, while Micron and Sandisk aren't too expensive.
MU PE Ratio (Forward) data by YCharts
That chart tells me everything I need to know about Intel's stock. Even if you utilize 2027's projections for it, it still trades at 90 times forward earnings. There's a lot of growth already baked into Intel's stock that it hasn't achieved, where Micron and Sandisk are trading below the valuation of the S&P 500, or about 21.5 times forward earnings.
Micron and Sandisk trail that premium mainly because the market is worried about the cyclical nature of the memory chip industry, which tends to boom followed by busts. However, with tight supply likely for at least another year and a half, I think both of these can go higher. But which is the better buy of the two? It's likely a toss-up, but with Wall Street analysts estimating more than 200% growth for the current fiscal year for Micron, I'll choose it, although Sandisk's stock is still a smart buy.
Even with its impressive 740% return over the past 12 months, some analysts believe Micron Technology (MU 5.68%) could still go higher. Three analysts recently raised their price targets for the stock to $1,500, representing a 45% increase from its current price, as of this writing.
Here's why this bull case for Micron stock is rooted in reality and why now could be a good time to buy shares despite their recent volatility.
Image source: Getty Images.
Here's why Micron has a chance of reaching $1,500 Investors have been wondering when the boom in artificial intelligence (AI) might fizzle out and if some stocks are currently in an AI bubble. And while some are certainly benefiting from the technology without having a strong foundation in it, that's not the case for Micron.
Consider the huge AI supercycle currently underway, which is driving sales of its memory processors. This year alone, some of the leading technology companies will have $750 billion in capital expenditures, mostly for AI.
That's a huge amount of AI spending, and it may not slow down anytime soon. Alphabet has already said it will spend up to $190 billion this year and added, "And next year, we expect it to significantly increase compared to 2026."
All of this spending is doing two very important things for Micron: It's driving huge sales of its memory chips and causing its processor prices to skyrocket due to demand.
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The results speak for themselves. Sales rose 345% in the 2026 third quarter to $41.5 billion, and adjusted earnings per share spiked more than 1,300% to $24.67 in the quarter. Management said recently that the run rate for its data center revenue (where sales of its memory chips live) is $100 billion for 2026.
In short, demand is high, allowing Micron to charge more for its memory processors and resulting in skyrocketing profits. So when analysts and investors look at the current data center boom and the company's soaring profits from it, it's not hard to imagine investors continuing to drive up its share price as AI infrastructure investments continue.
Some volatility is inevitable along the way The stock could reach $1,500, but it's also worth noting that some investors are questioning some of the AI spending from tech companies, which has led to market volatility.
Micron stock isn't immune to this, and some investors were disappointed when management didn't raise its full-year AI chip guidance recently, prompting some to sell. If investors continue to take an overly skeptical view of AI spending, it could impact the company's share price in the short term.
But Micron is highly profitable, its sales are expanding, and it's benefiting from a unique demand environment for its memory processors that could last for the next few years. When you add it all together, it's not unrealistic to think the stock could reach $1,500.
Over the past year, shares of Micron Technology (MU 5.68%) have soared more than 800%. As of this writing (June 30), Micron stock trades at $1,142 and sits comfortably in the trillion-dollar club. Micron's rapid ascent is naturally leading investors to ask whether the company is positioned for a stock split.
Let's explore the mechanics of stock splits, the typical reasons why companies pursue them, and whether such a move would deliver meaningful benefits to Micron.
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What is a stock split, and how does it work? During a stock split, a company simply increases the total number of outstanding shares by distributing additional shares on a proportional basis. For example, in a 5-for-1 split, a company with 1 million shares outstanding at $1,000 each would end up with 5 million shares trading at $200 post-split. In essence, the company's overall market capitalization remains unchanged because the reduction in stock price is offset by the increase in share count.
Image source: Getty Images.
Why do companies perform stock splits? Broadly speaking, companies pursue stock splits to improve both the perceived affordability and liquidity of their shares. When a stock trades at a level that appears expensive, smaller retail investors generally hesitate to purchase even a single share. This limits market participation and can potentially reduce trading volume.
A lower share price following the split erases this psychological barrier, often ushering in a broader base of buyers. Higher liquidity can make a position more attractive to institutional investors who prefer stocks with active markets.
Moreover, stock splits tend to coincide with periods of strong business performance and can be interpreted as a signal of management's confidence in future growth. While the action itself does not create any economic value for the business, the subsequent increase in investor enthusiasm can support continued upward momentum in the share price.
Will Micron split its stock? As shares approach $1,200, Micron stock is well above the range where most retail investors comfortably buy. The obvious perk for smaller investors with limited capital is that a stock split would lower the entry point in terms of absolute dollars to begin building a position. From a strategic standpoint, a split aligns with the practices that other semiconductor stocks -- such as Nvidia and Broadcom -- have completed during comparable rallies in recent years.
Given Micron's prolonged share price appreciation, announcing a split may be viewed favorably by the market as a step to sustain momentum. Operationally, however, the company gains little from performing a stock split. Micron's revenue, earnings, and competitive position would remain unaffected.
Overall, a stock split represents nothing more than a cosmetic adjustment that supports investor accessibility and sentiment without introducing meaningful downside. For these reasons, I do not think Micron will split its stock anytime soon.
You don't always have to dig for growth stocks no one knows about to find great deals. These two stocks are compelling choices if you have $1,000 to invest, and the tailwinds propelling them right now are poised to lift them to new highs in the long run.
Image source: Getty Images.
Micron continues to surge thanks to the memory boom Micron (MU 5.68%) has put itself at the center of the memory boom, just as Nvidia (NVDA 1.39%) has become the focal point of the AI chip trade. The company recently announced a strategic partnership with Anthropic, and it should translate into meaningful revenue growth for Micron.
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"Memory and storage are central to how efficiently we can train and serve Claude," Anthropic co-founder and chief compute officer Tom Brown said when discussing the partnership.
Micron certainly isn't relying on Anthropic to deliver substantial revenue growth. Sales more than quadrupled year over year in the company's fiscal 2026 third quarter. Revenue almost doubled sequentially, and the projected $50 billion in fiscal 2027 fourth-quarter revenue is a massive step up from the $41.86 billion Micron brought in this quarter.
Combine that with high profit margins, and it's no wonder Micron has trounced the S&P 500. It has more than tripled year to date, but a recent 20% correction has positioned the stock at an attractive 7 forward P/E ratio.
Meta Platforms' online ads are still thriving, and new opportunities are emerging Meta Platforms (META 4.80%) appears undervalued based on a forward P/E below 20. The company's 33% year-over-year revenue growth in Q1 shows it's still gaining significant ground in online advertising, which also offers high profit margins.
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Online ads and Meta Platforms' growing user base across its social platforms remain an exciting part of the company after all these years. However, Meta Platforms has also hinted at new revenue segments that can compound over time.
One of those revenue segments is AI glasses. The AI glasses industry is small, but other tech giants are rushing to enter the space, and Meta Platforms has a significant edge over them. Grand View Research projects a 24.2% CAGR for the industry through 2033, and investors should expect to hear more about Meta Platforms' AI glasses sales numbers in its second quarter.
AI glasses technology has advanced considerably since Meta Platforms tested the idea a few years ago, and it's priced for mass adoption, with AI glasses starting at $224.
Meta Platforms is also in the process of creating a predictions app, which could gain traction quickly given the company's 3.56 billion daily active users across its family of apps. Meta Platforms also intends to offer neocloud services once it has sufficient compute capacity, but that could take multiple years to materialize.
Meta Platforms is already a solid stock, given its online ads, which still account for almost all of the company's revenue. However, it is working to expand in multiple directions. Its healthy profits, balance sheet, and vast user base give it a solid foundation to capitalize on AI-related opportunities.
Retail investors talked up five hot stocks in this truncated week (June 29 to July 2) on X and Reddit’s r/WallStreetBets, driven by retail hype, earnings, listings, AI infrastructure momentum, and corporate/geopolitical news flow.
Some retail investors were joking about Meta’s announcement and how it caused all technology stocks to tumble. The stock had a 52-week range of $520.26 to $796.25, trading around $581 to $586 per share, as of the publication of this article. It declined by 18.31% over the year and 10.38% in the last six months. The stock was also down 11.69% YTD. META had a weak price trend in the medium, short, and long terms, with a solid quality score as per Benzinga’s Edge Stock Rankings. Palantir Technologies Some retail investors believed that the Magnificent 7 stocks would advance over the next two weeks, while software stocks like PLTR would be a “runner up.” The stock had a 52-week range of $106.37 to $207.52, trading around $128 to $130 per share, as of the publication of this article. It declined 2.13% over the year and 22.97% in the last six months. The stock dropped 27.26% YTD. Benzinga’s Edge Stock Rankings showed that PLTR had a weak price trend in the long, short, and medium terms, with a poor value score. Micron Technology Despite Burry’s short position, a few retail investors were still very bullish on memory stocks. The stock had a 52-week range of $103.38 to $1,064.64, trading around $974 to $978 per share, as of the publication of this article. It surged 701.35% over the year, higher by 209.29% over the last six months, and up 241.81% YTD. MU maintains a strong price trend over the long, short, and medium terms with a solid growth score, as per Benzinga’s Edge Stock Rankings. Space Exploration Technologies Some retail investors were awaiting the upside in SPCX as it was poised to join the Nasdaq 100 index on Monday. The stock has traded in the range of $147.11 to $225.64 since listing, and closed at $162.00 per share on Thursday. It has advanced by 8.00% since June 12, 2026. SPCX has had a weak price since the time it listed, as per Benzinga’s Edge Stock Rankings. Apple Some retail investors were doubtful of AAPL stock’s potential gains going into the next week. The stock had a 52-week range of $201.50 to $317.40, trading around $307 to $309 per share, as of the publication of this article. It advanced by 45.28% over the year, 13.88% over the last six months, and 13.53% YTD. According to Benzinga’s Edge Stock Rankings, AAPL was maintaining a strong price trend over the short, medium, and long terms, with a good quality score. Retail focus blended AI infrastructure momentum, earnings, and corporate news-driven narratives with broader market action during the week.
Image via Shutterstock
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The market has a habit of rewarding investors who recognize when an old pattern no longer applies. Cyclical industries eventually boom and bust, but structural shifts can stretch those cycles far longer than anyone expects.
Artificial intelligence has done exactly that for semiconductors. Companies supplying the hardware behind AI training are no longer serving ordinary PC and smartphone demand alone. They’re supplying an infrastructure buildout measured in hundreds of billions of dollars. That environment is important because legendary investor Michael Burry is betting that the evidence suggesting this cycle is different is just wrong.
Burry’s Bear Case Isn’t Without Merit In a recent Substack post, Burry revealed he established a direct short position against Micron Technology (NASDAQ:MU | MU Price Prediction) after the stock traded around $1,052 per share. He noted that he typically prefers buying put options, but implied volatility had made them too expensive. If volatility eases, he said he may add put positions to expand his bearish bet.
His reasoning follows the classic semiconductor playbook. Memory has historically been among the industry’s most cyclical businesses. Producers eventually expand manufacturing capacity, supply catches demand, prices collapse, and profits evaporate. Investors who buy near the top of that cycle often endure painful declines.
Burry has built his reputation by recognizing exactly those moments. The trade fits his long-held investing style. It also subverts the current narrative around memory that AI demand has broken that cycle, or at least significantly delayed its eventual onset.
Granted, Micron has experienced multiple brutal downturns over the past two decades. The company’s revenue fell from $30.8 billion in fiscal 2022 to $15.5 billion in fiscal 2023, as memory prices collapsed following pandemic-era overproduction.
But let’s examine why today’s environment looks very different.
Micron’s HBM production is effectively sold out through the end of 2026. Meanwhile, the four largest cloud providers are collectively expected to spend more than $700 billion on AI infrastructure this year with substantially more over the next several years, creating sustained demand for advanced memory.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Micron Technology didn't make the cut. Grab the names FREE today.
The competitive landscape also favors producers.
Market Industry Structure DRAM Three companies control roughly 90% of global production HBM Micron, Samsung Electronics, and SK hynix account for essentially the entire market That oligopoly matters because manufacturers have become far more disciplined about adding capacity than they were a decade ago. Instead of flooding the market, they’re expanding cautiously while prioritizing profitability.
Surprisingly, that’s exactly the opposite of the conditions that fueled previous memory crashes.
Capacity Is Growing — But Not Fast Enough That doesn’t mean Micron is risk-free. New fabrication plants are under construction, and eventually supply will increase. At some point, pricing will normalize. Burry is almost certainly correct that memory remains cyclical over the very long term. The problem is timing.
Building leading-edge memory fabs requires tens of billions of dollars and years of construction. Even after facilities open, ramping advanced HBM production isn’t immediate. Meanwhile, AI demand continues growing faster than manufacturers can satisfy it.
In other words, the cycle has been stretched by an unprecedented wave of AI investment.
Key Takeaway In short, Michael Burry may ultimately prove right that Micron won’t escape cyclicality forever. History argues that no commodity semiconductor business does.
But investors should distinguish between eventually and today. The current memory market is supported by an AI spending boom unlike anything the industry has previously experienced. With three companies controlling nearly all advanced memory production, disciplined capacity expansion, and demand exceeding supply for years rather than quarters, the traditional boom-and-bust playbook appears less useful than it once was.
For long-term investors, betting against Micron today may mean betting against the very AI infrastructure buildout that’s reshaping the semiconductor industry. That has rarely been a profitable position to take. Ultimately, Burry may be taking the right stance, but far too early.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Micron Technology didn't make the cut. Grab the names FREE today.
SummaryMicron Technology, Inc. delivered a record-breaking quarter with Q3 FY26 revenue of $41.5B, up 346% YoY, and non-GAAP gross margin surging to 84.9%.MU's growth is powered by AI data center demand and transformative long-term take-or-pay contracts, securing ~50% of revenue and reducing cyclicality.Management guides for $50B revenue next quarter and $30B in free cash flow for Q4 FY26, fully funding aggressive CapEx from operational cash generation.I estimate MU's EPS at $114 in 12 months, supporting a $1,725/share price target by July 2027 at 15x P/E, with upside potential if growth outperforms. Eoneren/E+ via Getty Images
Micron Technology, Inc. (MU) reported the most important quarterly earnings last week in its 47-year-long history. And the market's reaction wasn't anything else, other than confusion. The day after the earnings, Micron's stock skyrocketed 15.7%, reaching its all-time high
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Analyst’s Disclosure: I/we have a beneficial long position in the shares of MU, NVDA 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.
Shares of Micron Technology (MU 5.68%) have advanced 240% year to date. That makes it the second-best-performing stock in the S&P 500 (^GSPC +0.00%), the first being rival memory-chip maker Sandisk, which has added more than 600% in 2026.
Micron shareholders recently got some good news. Several Wall Street analysts raised their forward earnings estimates after the company's latest financial report. Additionally, Nvidia (NVDA 1.39%) CEO Jensen Huang says demand for memory chips will continue to outpace supply for several years.
Here's what investors should know.
Image source: The Motley Fool.
Micron's customers are signing unprecedented multiyear deals Micron develops and manufacturers memory and storage solutions based on NAND flash and dynamic random-access memory (DRAM) chips. Both types of memory are critical to artificial intelligence (AI) workloads. NAND and DRAM serve as long-term storage and working memory, respectively. And high-bandwidth memory (HBM) is a specific type of DRAM that feeds data to graphics processing units at very high speeds.
Micron is not the market leader in any segment. In fact, the company is actually tied with Sandisk for fourth place in NAND, it ranks third in DRAM, and it's tied with SK Hynix for second place in HBM, according to Counterpoint Research. But Micron has still benefited greatly from the unprecedented memory-chip supply shortage created by the AI infrastructure build-out.
In the third quarter of fiscal 2026 (ended in May), total revenue rose 345% to $41.4 billion due to particularly strong sales growth in the cloud and data center segments, as NAND and DRAM prices more than doubled versus the previous year. On the bottom line, non-GAAP (adjusted) net income increased more than 1,200% to $25.11 per diluted share.
The best news came from CEO Sanjay Mehrotra. He said Micron has now signed 16 multiyear agreements with customers that include "binding commitments to purchase specific volumes" of chips. Such deals are unprecedented in the memory-chip industry, which has historically run on contracts measured in days, and they afford Micron greater visibility into future cash flows.
Mehrotra also told analysts that physical AI products -- autonomous cars and robots -- would keep memory-chip demand elevated for decades to come. "We expect a sustained, substantial multidecade memory demand cycle to begin in the latter part of this decade."
Several Wall Street analysts dramatically raised earnings estimates for fiscal 2027 Memory-chip sales have historically been highly cyclical. The industry has oscillated between periods of too little supply (and price hikes) and periods of too much supply (and price cuts). But Micron's multiyear contracts include floor prices that should moderate (or even eliminate) that cyclicality in the future.
Consequently, many Wall Street analysts have dramatically raised their forward earnings estimates. The consensus now says earnings will hit $155 per share in fiscal 2027 (ends in August), up from the prior estimate of $98 per share. The new forecast implies earnings will increase 168% annually over the next five quarters.
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Nvidia CEO Jensen Huang says the memory-chip supply shortage will last for several years At the tech event CES in January, Nvidia CEO Jensen Huang explained that memory was quickly becoming the most critical bottleneck in AI inference workloads. Not only are more people interacting with AI applications, but their interactions are getting longer, and the underlying models are getting larger. AI systems need more memory to support those changes.
Six months have passed since Huang made those observations, and the situation has not improved. "The whole industry supply chain, everything from wafers to packaging to silicon photonics, everything is in short supply because the demand is so high. It is going to persist for several years," Huang told reporters in South Korea in June.
That's good news for Micron (and other memory-chip makers). While it does not mean the industry has escaped cyclicality, it does point to strong demand for the foreseeable future. So it's reasonable to think Micron will continue to deliver strong financial results for many quarters to come.
Michael Burry spent this week putting entry prices on a bet against the artificial intelligence (AI) trade. In a June 30 post on his Substack, the hedge fund manager made famous by "The Big Short" disclosed short positions in Nvidia (NVDA 1.39%), Tesla (TSLA 7.35%), Applied Materials (AMAT 7.51%), Caterpillar (CAT 2.81%), and the iShares Semiconductor ETF (SOXX 5.65%). Two days later, he added a short against Micron Technology (MU 5.68%), reportedly entered near $1,052 per share.
Burry is the investor who bet against the housing market ahead of the 2008 crash. When he targets three of the market's most widely held stocks at once, the question practically asks itself: Should you be worried?
The answer starts with taking his argument seriously.
Image source: Getty Images.
The case Burry is making Burry's argument isn't that these businesses are failing. It's that their stock prices have stretched to historical extremes. Micron, he reportedly noted, now trades further above its 200-day moving average than at any point since 1984 -- a stretch that includes the dot-com peak.
History does much of the work in his thesis. Micron has been public for four decades, and by Burry's reported count, its stock has suffered 34 drawdowns of more than 30% along the way. In his view, the AI boom hasn't repealed the memory cycle. It has simply made investors forget the cycle exists.
The rest of the short book extends the same logic across the AI supply chain: Applied Materials sells the equipment used to make advanced chips, Caterpillar supplies machinery and power systems for the data center build-out, and the semiconductor ETF wraps the whole group into a single ticker.
Of course, a famous name and an alarming chart don't make a thesis correct. Investors have been calling the AI trade a bubble for more than two years while these stocks kept climbing. The more useful question is how much each of the three stocks depends on the optimism Burry is attacking.
Three stocks, three different bets Micron is where his case is most interesting, because the stock doesn't look expensive on today's numbers. In its fiscal third quarter (the period ended May 28, 2026), the memory maker's revenue more than quadrupled year over year to $41.5 billion, and it rose about 74% from the prior quarter. Management guided for roughly $50 billion in revenue in fiscal Q4.
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At about $976 per share as of this writing, Micron trades at roughly 22 times earnings. That looks modest. But memory peaks usually do -- the multiple compresses as earnings spike, and the argument is never about the multiple. It's about whether earnings this high can last. Burry is betting they can't. Micron's counterargument is that its new multi-year customer agreements make demand more durable and predictable than in past cycles.
Nvidia may be the strangest name on the list, because its valuation is arguably the easiest to defend. Revenue in the chipmaker's fiscal first quarter (ended April 26, 2026) rose 85% year over year to $81.6 billion, with data center revenue climbing 92%. Yet the stock trades at about 30 times earnings. If the AI trade is a bubble, its largest member is priced like something much tamer.
Tesla, meanwhile, is the opposite case. The electric-car maker delivered 480,126 vehicles in the second quarter, up about 25% year over year -- and the stock still fell about 7.5% the day of the report. But the market's focus has moved past volume to what each vehicle earns. Tesla's first-quarter operating margin was just 4.2%, and with earnings per share of $1.10 over the past 12 months, the stock trades at more than 350 times earnings. Burry doesn't need a cycle argument here. He just needs Tesla's robotaxi and software profits to arrive later than the valuation assumes.
So, should you be worried?
Not about the disclosure itself. A short-seller announcing his positions changes nothing about these businesses. And Burry has been early on big calls before. Even his famous housing bet took years to pay off.
But his stress test lands harder on some of these stocks than others. Nvidia's numbers do the most to answer him, since 85% growth at 30 times earnings leaves a cushion the other two don't have.
The other stocks are arguably harder to defend. Micron asks investors to believe memory pricing can hold at levels the industry has historically struggled to sustain through a full cycle. And Tesla asks them to pay more than 350 times earnings, while the profitable version of the company remains mostly ahead of it.
Overall, I wouldn't sell a stock just because Michael Burry is betting against it. But his shorts are a useful prompt for an honest look at position sizes. If a memory downturn or a slipped robotaxi timeline would do serious damage to a portfolio, that risk is worth considering and potentially even addressing while the argument is still unsettled, not after it's over (and potentially too late).
Micron Technology (MU 5.68%) stock has been in roaring form over the past year, gaining an astounding 698% as of this writing.
This stunning surge has brought Micron's stock price to nearly $1,000. Investors, therefore, may be wondering whether this high-flying artificial intelligence (AI) stock will undergo another forward stock split. After all, Micron has a history of executing stock splits, and management may now want the stock to become accessible to a wider pool of investors following its impressive rally over the past year.
Let's try to find out if the chipmaker is indeed going for a stock split.
Image source: Micron Technology.
The time is ripe for Micron's stock split A stock split happens when a company multiplies or divides its outstanding share count while keeping the overall market capitalization unchanged. A forward stock split is the most common type of stock split, in which a company increases its outstanding share count and lowers the price per share to keep the market cap constant.
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The last time Micron executed a forward stock split was in the year 2000. It split its stock twice before that, once in 1994 and again in 1995. All these have been forward stock splits, suggesting that Micron has increased its outstanding share count. While a stock split does nothing to change a company's fundamentals and prospects, as it is simply a cosmetic move, there is a belief that doing so increases the demand for a stock among retail investors.
As Micron is trading at almost $1,000, a stock split could significantly reduce the price of each share and make the stock more desirable among smaller investors. Nvidia, for instance, announced a 10-for-1 forward split in June 2024 following an AI-fueled rally that sent its stock price to $1,200. Nvidia stock has jumped by 60% since it started trading on a split-adjusted basis just over two years ago.
So, a stock split could indeed be a tailwind for Micron stock by increasing its appeal among retail investors, especially given that it trades at an attractive valuation and is growing at a phenomenal pace.
The stock is a buy irrespective of a split Many brokerages allow investors to buy fractional shares, so they can still buy Micron despite its high stock price. So, if your brokerage offers the option to buy fractional shares, you can consider investing your cash in Micron right away.
After all, the stock trades at an extremely attractive 23 times earnings right now, a discount to the tech-laden Nasdaq-100 index's earnings multiple of 35. Micron's forward earnings multiple of just 7 is even more attractive compared to the index's multiple of 27. Buying Micron at this valuation is a no-brainer, given its astronomical growth.
The company's earnings per share grew by just over 1,200% year over year in the third quarter of fiscal 2026 to $25.11. Micron's guidance of $31.00 in earnings per share for the current quarter points to a year-over-year jump of just over 10x. Management noted on the latest earnings call that the memory supply shortage is going to last beyond 2027. Given that memory demand will continue thriving in the future, the favorable pricing environment fueling Micron's phenomenal earnings growth is here to stay.
So, Micron stock remains a screaming buy even after its red-hot rally over the past year, regardless of a stock split, as its incredibly cheap valuation and phenomenal growth point to further gains.
Micron Technology (MU 5.68%) has delivered one of the most explosive performances among semiconductor stocks in 2026. To date, the memory company's shares are up 241% this year, making it the second-highest gainer in the Nasdaq-100.
After such a meteoric rally, most investors might assume the easy money has already been made. But in my view, Micron's true potential is only beginning to unfold. The catalyst that powered its meteoric ascent -- unprecedented demand for advanced memory in artificial intelligence (AI) data centers -- is accelerating, not peaking.
That sets the stage for Micron to enjoy substantially higher earnings power, and puts the stock price on a trajectory that could lead it to trade at $2,000 or more within the next year.
Image source: Micron Technology.
Breaking down Micron's booming business Over the last few quarters, Micron has meaningfully accelerated both its revenue and earnings growth. The reason is simple: The company's products sit at the center of the AI infrastructure build-out. Hyperscalers are pouring record sums of capital expenditures into the construction of new data centers, which has resulted in acute shortages of DRAM, NAND, and high-bandwidth memory (HBM) -- all three of which Micron specializes in.
These shortages are giving Micron significant pricing power in one of the chip market's highest-growth segments. Unlike past cycles for the memory market, where demand was broad and easily satisfied, today's AI-driven demand is concentrated in specific products where Micron holds a strong competitive position alongside SK Hynix and Samsung. The implementation of long-term strategic customer agreements further locks in revenue and profit visibility -- helping reduce the traditional volatility of the memory business.
Taken together, the result is a clear upward trajectory for Micron's top and bottom lines. The narrative for the memory and data storage market is no longer a cyclical story, but rather one of structural expansion in an expanding addressable market. That puts Micron in a powerful position.
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Micron's path to $2,000 per share Consensus estimates from Wall Street analysts currently project that Micron's EPS will be $73.32 for the current fiscal year and $149.64 for the next fiscal year. These figures clearly reflect staggering optimism as the AI infrastructure build-out continues.
MU EPS Estimates for Current Fiscal Year data by YCharts.
With that said, Micron stock trades at a modest forward price-to-earnings (P/E) ratio of 6.7. I think that's a conservative level relative to the company's expected earnings growth. Taking the point further, that low multiple could indicate that the market is still pricing Micron as if it were in a cyclical industry, rather than viewing it as a hypergrowth business undergoing a fundamental shift.
I think Micron's current valuation profile leaves significant room for a rerating as the durability of AI-driven memory demand becomes more widely recognized by growth investors. For the stock price to hit $2,000 if the forward P/E holds steady at 6.7 would require next year's EPS to reach about $298. That's essentially a double from Wall Street's already aggressive forecast.
The more realistic path to reaching a $2,000 stock price is for Micron's forward P/E to rise closer to 13. While that would be a meaningful expansion from current levels, investors have seen similar step-ups by other memory and storage stocks, such as Sandisk.
In short, I think Micron's days of trading at a deep cyclical discount are limited. The foundation for meaningful share price appreciation has been set, making such a stock surge not just plausible, but highly probable.
While the market has been driven higher by artificial intelligence (AI) stocks over the past few years, these stocks have recently pulled back, creating a potential buying opportunity. The fear is that spending could eventually start to slow.
But right now, hyperscalers (owners of large data centers) have indicated that they are getting strong returns on their investments and that they continue to plan to spend big money building out AI data centers.
Let's look at three AI stocks to buy on this dip.
Image source: Getty Images.
Nvidia: The original AI play No company has benefited more from the AI infrastructure build-out than Nvidia (NVDA 1.39%), which has grown to become the world's largest company by market cap. Its graphics processing units (GPUs) are the primary chips used to train AI models, and its CUDA software, where most foundational AI code has been written, gives it a wide moat in this area.
However, the Nvidia of today is more than just GPUs; it has become a complete AI infrastructure player. It has a strong networking portfolio, which has been one of its fastest-growing areas, while its "acquisition" of Groq brought chips specifically for inference. It's also dived into the data center central processing unit (CPU) market. Together, this now allows it to offer complete systems for specific AI tasks, which should position it for continued strong growth well into the future.
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AMD: The AI upstart Advanced Micro Devices (AMD 4.60%) may have lost to Nvidia when it came to AI model training, but the company looks well positioned for inference and agentic AI.
Inference is eventually expected to become larger than training, and AMD's GPUs are much better suited for this task. Inference is much more memory-bound than compute-bound, and AMD's chiplet design allows it to be packaged with more memory. Its recent acquisition of MEXT and its memory optimization technology, and ZT Systems, meanwhile, will allow it to offer complete systems designed for inference. The company already has two large inference partnerships, which should be a major area of growth in the coming years.
On top of that, the company is positioned to be a major beneficiary of agentic AI, which will require a significant increase in the use of CPUs in AI data centers. This will boost AMD, which is a leader in the space and has been taking market share away from rival Intel. AMD is already developing CPUs specifically for agentic AI and sees this growing to be a $120 billion addressable market over the next few years.
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Micron: A memory winner The memory market continues to explode higher, and as one of the big three DRAM (dynamic random access memory) makers, Micron Technology (MU 5.68%) continues to be a huge beneficiary. The company just posted incredible numbers for its fiscal third quarter, with revenue surging from $9.3 billion a year ago to $41.5 billion and gross margin expanding to 84.6% from 37.7%.
The demand for high-bandwidth memory (HBM), which is a special form of DRAM packaged with GPUs to optimize performance, remains insatiable, with Micron's supply sold out for 2027 and into 2028. It expects HBM to be a $100 billion market next year. Meanwhile, it has now signed long-term strategic customer agreements that include both HBM and NAND (flash memory) that are non-cancellable, take-or-pay arrangements with annual volume commitments, with some extending until 2030. This should help reduce some of the typical cyclicality of the memory business.
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Micron is working to continue increasing capacity, although the market is expected to remain supply constrained for the foreseeable future. Between its SCAs and supply-demand dynamics, this makes the stock a good one to buy after the recent pullback.
Micron Technology (MU 5.68%) once again turned in a spectacular quarter when it reported its fiscal third-quarter results after the bell on June 24. While the stock initially surged, it has since given back most of its gains. The stock is still up around 236% on the year.
Let's dig into the memory maker's results and prospects to see whether the artificial intelligence (AI) stock is a buy.
Micron is hitting on all cylinders Micron is one of the three major DRAM (dynamic random-access memory) manufacturers, and it has been benefiting from soaring DRAM and NAND (flash) memory prices, as both remain in short supply due to the data center build-out. Over 75% of Micron's revenue comes from DRAM, with the rest largely from NAND.
Image source: The Motley Fool.
The DRAM market is being fueled by the need for high-bandwidth memory (HBM), packaged with AI chips such as graphics processing units (GPUs) to optimize performance. The fast-growing inference market, meanwhile, tends to be even more memory-intensive than AI model training, further driving demand dynamics. Micron's HBM supply is booked out through 2027 and into 2028, and it sees the total addressable market reaching $100 billion in 2027.
It noted that the industry outlook for both the DRAM and NAND markets is that demand will continue to significantly outpace supply. It said that supply challenges for HBM and DRAM, in particular, remain "severe." It upped its capital expenditure (capex) budget to $27 billion this fiscal year as it begins construction on new greenfield projects to increase supply.
Overall, for its fiscal third quarter, Micron reported that its revenue increased from $9.3 billion to $41.5 billion, easily surpassing the $35.8 billion consensus, as compiled by LSEG.
By segment, cloud memory revenue surged fourfold to $13.8 billion, while core data center revenue climbed from $1.5 billion in the year-ago period to $11.5 billion. Mobile revenue jumped from $3.3 billion to $11.5 billion, while automotive and embedded revenue rose from $1.1 billion to $4.6 billion. Gross margins surged to 84.6%, up from just 37.7% a year ago, and were up from 74.4% in fiscal Q2.
Adjusted earnings per share (EPS) came in at $24.67 compared to $1.68 a year ago. That was well above the $20.78 adjusted EPS analysts expected.
Looking ahead, Micron guided for fiscal Q4 revenue of around $50 billion with gross margins of approximately 86%. The company is looking for adjusted EPS of about $30.73 at the midpoint.
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Despite its continued surging revenue and gross margin expansion, Micron stock remains cheap, trading at a forward price-to-earnings (P/E) ratio of 7 times fiscal 2027 analyst estimates. While historically a boom-and-bust cyclical business, the company now has about 40% of its revenue locked up in long-term strategic customer agreements. At the same time, there are a few signs that the memory market will be in supply-demand balance anytime soon, given the surge in AI infrastructure spending and demand.
As such, the stock looks attractive at current levels.
Micron Technology (MU 5.68%) stock has rocketed more than 755% in the past year. Memory chips are now one of the biggest, if not the biggest, bottlenecks in the artificial intelligence (AI) build-out. This has boosted memory prices and sent Micron's earnings soaring.
The stock's forward earnings multiple of 14 is expensive relative to Micron's historical trading range, where it usually trades at under 10 times forward earnings. But this higher valuation could still be attractive if the company can avoid past boom-and-bust cycles and deliver more sustainable growth. Management has a promising strategy to solve it.
Image source: The Motley Fool.
Memory has become vital to the AI build-out Micron's latest results for the fiscal 2026 third quarter underscore just how strategically important memory has become. Revenue climbed 346% year over year, reaching $41 billion, while earnings per share more than doubled to $24.67. Management expects revenue to reach $50 billion in the current quarter. Gross margin guidance also points to a slight increase to roughly 86%, as memory demand continues to outpace supply.
Every AI system is powered by graphics processing units (GPUs), central processing units (CPUs), and application-specific integrated circuits (ASICs), and these chips all rely on high-performance memory in their architectures. As a result, Micron now expects tight supply conditions to persist beyond calendar 2027.
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Micron is locking customers into long-term purchase agreements This outlook has boosted investor confidence that Micron can produce sustained earnings growth for at least the next few years. The more complicated question is what happens to memory pricing after 2027, when increases in supply and normalizing demand could trigger the next downturn.
On that front, Micron is working to reduce pricing volatility through longer-term customer commitments. During the earnings call, the company highlighted progress on 16 Strategic Customer Agreements (SCAs) -- take-or-pay contracts spanning 2026 through 2030. These are binding commitments for customers to purchase specified volumes, helping Micron lock in demand and improve planning. Management expects at least half of the company's revenue to come from SCAs once the full set of deals is completed.
So far, 14 agreements account for about $100 billion in cumulative revenue, roughly double Micron's trailing-12-month revenue of $90 billion. Just as important, Micron says these SCAs are structured to support gross margins well above prior cyclical peaks -- a key detail if the goal is to make earnings more steady.
What does this mean for investors? Overall, the SCA strategy could make Micron's business more stable and therefore worthy of a higher earnings multiple. Still, the cyclical risk hasn't disappeared. These agreements cover only part of future revenue. It won't eliminate business volatility, but it may help reduce it.
The stock could certainly push to new highs if the demand outlook stays strong. But investors should keep an eye on manufacturing capacity expansion, including new builds by Micron, Samsung, and SK Hynix, as higher supply can eventually put pressure on pricing. Going forward, Micron's progress signing additional SCAs -- and its margin guidance -- will be critical signals for whether this cycle truly looks different.
Every so often, a company's numbers stop making sense next to its soaring profits. Micron Technology (MU 5.68%) is having one of those moments. In its fiscal third quarter (the period ended May 28, 2026), the memory maker earned $24.67 per share on a generally accepted accounting principles (GAAP) basis. Its quarterly dividend, declared the same week, was $0.15 -- the same $0.15 it declared last quarter. A company earning that much cannot keep paying that little forever.
Something has to give.
Image source: Getty Images.
A cash machine, for now The quarter was a blowout in the truest sense. Revenue rose 346% year over year to a record $41.46 billion, and net income reached $28.24 billion, powered by demand for the high-bandwidth memory that goes into AI accelerators. Management guided for even more in the current quarter: about $50 billion in revenue.
To grasp the scale, Micron earned more in this single quarter than it did in some entire years of the last cycle. Revenue of $41.46 billion was up from $9.3 billion a year earlier, and that guide of $50 billion would be another 20% jump on top of it. High-bandwidth memory -- the specialized chips stacked next to AI processors -- is booked out well into next year, which is why the company can guide with such unusual confidence.
"Micron's record fiscal Q3 financial results and even stronger outlook for Q4 reflect the strategic value of memory in the AI era," said CEO Sanjay Mehrotra in the company's earnings release.
And, unsurprisingly, the cash is piling up.
Micron generated $25.4 billion of operating cash flow and $18.3 billion of adjusted free cash flow in the quarter, ending with about $30.2 billion in cash and investments. Set the $0.15 quarterly dividend against $24.67 of quarterly earnings and the payout ratio is well under 1% -- almost a rounding error.
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Where the cash goes next So where does all that money go?
Three doors are open: a much bigger dividend, share buybacks, or reinvestment in the business. History offers a warning on that last one. Memory is cyclical, and makers have a habit of plowing cash into new capacity at the peak, only to watch prices crash once it comes online. Micron is doing some of that already -- capital expenditures were $7.1 billion in the quarter and rising as it builds cleanroom capacity for AI memory.
Management has been fairly explicit about the sequence. It says it expects to return 100% of its excess cash to shareholders over time, and plans to step up capital returns later this year.
So, what is its plan? Capacity first, bigger shareholder returns after. A boosted dividend and buybacks are the pressure valve that hasn't been opened yet.
This order of priorities when it comes to how Micron plans to deploy its excess cash makes sense. Buy back a lot of stock at the top of a memory cycle, and you risk overpaying right before earnings roll over. Hike the dividend too aggressively, and you may have to defend it through the next downturn. Micron has been burned by both mistakes before, and its cautious approach here arguably reflects a management team that remembers exactly what the bottom of a memory cycle feels like.
For a dividend stock trading at about 22 times earnings, that gap between what Micron makes and what it pays is the clearest sign of how extreme this memory up cycle has become. I'd expect the payout and buybacks to climb meaningfully once those commitments free up.
Micron Technology (MU 5.68%) and Intel (INTC 5.61%) have been some of the top-performing stocks of the year. Both stocks are up by more than 200% year to date as AI tailwinds extend their rallies. Micron specializes in memory chips, while Intel's AI products have excited investors.
Here's what investors should know when comparing both stocks.
Image source: Getty Images.
Intel's CPUs, Foundry, and AI chips are gaining momentum Intel offers application-specific integrated circuits (ASICs) that have been gaining momentum and are a cheaper alternative to Nvidia's graphics processing units (GPUs), but its CPUs are at the center of its AI rally. CPUs, or central processing units, act as the brains of GPUs, and AI agents are making them more valuable.
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Agentic AI is more complex than large language models. Right now, an AI data center requires approximately 1 CPU per 8 GPUs. Thanks to AI agents, those same data centers will need 1 CPU for every 1-2 GPUs.
AI data centers aren't going to get rid of their Nvidia chips, so they will have to buy more CPUs like the one Intel offers. This simple math problem indicates that CPU sales will surge.
Intel has already seen this demand translate into revenue growth. Although the company posted 7% year-over-year revenue growth across its business, Intel's Data Center and AI segment was up 22% year over year. It made up more than one-third of Intel's total revenue.
AI data center investments should ramp up in the years ahead, and as the U.S. government looks for ways to expand the industry, Intel will be one of the first companies it thinks of. That's because the Trump administration invested $8.9 billion in Intel last year, resulting in a 10% stake in the company.
The investment produced a substantial return for the Trump administration, and the administration is financially incentivized to prioritize Intel for AI opportunities. The administration has been helping Intel partner with fellow tech giants as Trump pushes them to use Intel Foundry factories to produce their chips domestically. Those partnerships have contributed to 16% year-over-year revenue growth for Intel Foundry in Q1.
Micron's memory chips continue to experience parabolic demand Micron's memory chips enable AI chips to operate efficiently and retain the information they create and process. These memory chips also enable AI chips to instantly access stored information.
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While some investors were nervous about memory chips entering a downward cycle, Micron silenced critics by quadrupling its revenue year over year in the third quarter of fiscal 2026. Net income more than doubled sequentially and was up by more than tenfold year-over-year.
This parabolic growth resembles Nvidia's growth numbers a few years ago. While Nvidia is still delivering tremendous financial results, Micron is currently in a league of its own. Its guidance for the fourth quarter of fiscal 2026 suggests more growth is on the way. The projected $50 billion in revenue represents more than 20% sequential growth from the $41.86 billion in fiscal 2026 third-quarter sales.
Critically, Micron also announced multiyear strategic customer agreements that offer more revenue visibility. These deals also insulate Micron from the cyclical nature of the business, but with AI still in its early innings, the market opportunity is likely to expand for multiple years. Micron is at the center of it with its high-bandwidth memory chips.
The final verdict Micron comes out on top because it is currently achieving substantial revenue and net income growth, while Intel can do so in the future. It's hard to find a company that can quadruple sales year over year while trading at a 7.4 forward P/E ratio. That's a lower P/E ratio than most banks despite Micron delivering higher growth rates than Nvidia.
Intel trades at a P/E ratio of 147 and has produced only 7% year-over-year revenue growth. Key AI segments delivered double-digit growth, and a strong relationship with the Trump administration can open the door to more tech partnerships and revenue growth.
Intel is building stronger fundamentals and positioning itself for meaningful market-share expansion, while Micron has already reached that stage and still trades at a lower valuation.
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Richard Windsor, founder of Radio Free Mobile, pushed back against the panic gripping AI stocks in a recent episode of Bloomberg Horizons Middle East & Africa. His argument is that the semiconductor tumble reflects rate sensitivity in richly valued names, and the market has overshot on software incumbents by assuming AI will hollow out application demand.
The Philadelphia semiconductor index fell as much as 6% on Thursday, right after its best quarter ever, and chip stocks are posting their worst two-day selloff in nearly a month. Yet only about a 20% probability of a Fed rate hike is priced in for July. In Windsor’s view, the market has gone too far, leaving quality software names trading below their long-term potential.
The AI Selloff Looks More Like a Valuation Reset Than a Demand Problem Windsor believes that: “The stocks are basically reacting to the potential for interest rate increases because these are highly valued stocks. They’ve already run a long way. Consequently, they’re much, much more volatile than the average in the market.”
NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) fits that description. Shares closed at $194.83 on July 2, down 12.46% over the past month, even after fiscal Q1 2027 revenue of $81.62 billion, up 85.2% year over year, and Data Center revenue of $75.25 billion.
CEO Jensen Huang framed why Nvidia’s opportunity is so compelling in the company’s Q1 earnings release: “The buildout of AI factories, the largest infrastructure expansion in human history, is accelerating at extraordinary speed.” The stock trades at a forward P/E of 23 and has a beta of 2.20.
Compute Demand Still Far Outstrips Supply Windsor pointed to Micron Technology (NASDAQ:MU) and the premium prices private compute reseller Axiom charges both Anthropic and Google as evidence of “a market where there is extreme [shortage] of compute.” Micron’s shares dropped 19.61% in the past week to $975.56, but fiscal Q3 2026 revenue hit $41.46 billion, up 345.7% year over year, non-GAAP EPS printed at $25.11, and Q4 guidance calls for $50.0 billion in revenue at ~86% gross margin. CEO Sanjay Mehrotra said Micron’s “multi-year Strategic Customer Agreements will significantly enhance the durability and predictability” of results.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Microsoft didn't make the cut. Grab the names FREE today.
Why Wall Street Has Software Wrong Windsor believes software is meaningfully overlooked today, and could be a place capital rotates to: “One sector that is underpriced would have to be the software sector. The general view of the market is the software sector selling to the market is dead because everyone is going to run AI and will no longer have to buy software. I think that’s taking it too far.”
Salesforce Is Already Turning AI Into Revenue Salesforce (NYSE:CRM) closed at $166.11, down 37.77% over the past year, at a forward P/E of 12 with an analyst target of $246.44. AI monetization is accelerating, with Agentforce ARR reaching $1.2 billion, up 205% year over year. Combined Agentforce plus Data 360 ARR was nearly $3.4 billion. Marc Benioff called Agentforce “the biggest growth opportunity for our customers, and for Salesforce.”
Adobe’s AI Business Is Growing Faster Than Investors Realize Adobe (NASDAQ:ADBE) trades at $219.72, down 41.95% over the past year, with a forward P/E of 9 and PEG of 0.58. Q2 FY2026 delivered record revenue of $6.62 billion, up 13% year over year, and AI-first ARR that tripled year over year to exceed $500 million. Shantanu Narayen tied it directly to the thesis: “Adobe delivered record revenue of $6.62 billion in Q2 reflecting strong AI-driven demand across our customer groups.”
Microsoft’s AI Spending Is Fueling Long-Term Growth Microsoft (NASDAQ:MSFT) sits at $390.49, off 19.85% over 12 months, at a forward P/E of 20. Fiscal Q3 2026 revenue climbed to $82.89 billion (+18.3% YoY), Azure grew 40%, and Satya Nadella flagged that the “AI business surpassed an annual revenue run rate of $37 billion, up 123% year-over-year.” Commercial RPO stands at $627 billion, up 99% YoY. Heavy AI capex explains why some Magnificent Seven names have lagged pure-play chip winners despite strong demand signals.
What Investors Should Watch Windsor’s thesis ultimately comes down to separating short-term market sentiment from long-term business fundamentals. While higher rates have pressured richly valued AI leaders, demand for compute continues to outstrip supply, and enterprise software companies are already generating meaningful AI-driven revenue growth. If those trends continue, today’s discounted software valuations may prove to be an opportunity for investors willing to look beyond the current AI rotation.
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NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) and Micron Technology (NASDAQ:MU) both delivered blockbuster earnings tied to the same AI capex wave, yet the businesses behind the tickers look nothing alike.
NVIDIA sells the compute platform. Micron sells the memory that feeds it. With $10,000 to allocate, the question is whether you want the ecosystem owner or the picks-and-shovels supplier catching a once-in-a-decade pricing cycle.
Blackwell Prints Cash. HBM4 Rewrites Micron’s P&L. NVIDIA’s Q1 FY2027 landed with revenue of $81.61 billion, up 85.23% YoY, and non-GAAP EPS of $1.87. Data Center did the heavy lifting at $75.25 billion (+92% YoY), with networking (InfiniBand, Spectrum-X, NVLink) growing 199%.
Jensen Huang called it “the largest infrastructure expansion in human history.” The Blackwell 300 ramp, Vera Rubin roadmap, and hyperscaler commitments from OpenAI, Anthropic, and Meta suggest the pipeline is booked well into 2027.
Micron’s fiscal Q3 2026 was arguably wilder. Revenue hit $41.46 billion, up 345.72% YoY, EPS came in at $25.11 against a $20.28 estimate, and GAAP gross margin exploded to 84.6% from 37.7% a year earlier.
HBM4 in high-volume shipments to a lead AI accelerator customer is doing what pricing power looks like on paper. CEO Sanjay Mehrotra pointed to “multi-year Strategic Customer Agreements” as the mechanism designed to tame the historical cyclicality that has burned Micron shareholders before.
Business Driver NVIDIA Micron Main Growth Engine Data Center GPUs and networking HBM4 and cloud memory Gross Margin 75.0% non-GAAP 84.9% non-GAAP Guidance $91B ±2% $50B ±$1B Ecosystem Moat vs. Commodity Upcycle NVIDIA’s advantage is CUDA, the software layer nobody has cloned, plus a platform that stretches from Omniverse to DRIVE Hyperion (Hyundai, BYD, Uber) to Isaac GR00T robotics. That breadth justifies the premium multiple.
Micron’s advantage is scarcer: it is the only U.S.-based memory manufacturer, and HBM supply is tight. The catch is concentration. HBM4 volume hinges heavily on a single lead customer, and a $325M Q3 debt-prepayment loss reminds you Micron still runs a capital-hungry, cyclical business.
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Valuation tells the story. NVIDIA trades at a 30x trailing P/E and 23x forward. Micron sits at 26x trailing and a startling 8x forward, which either signals deep skepticism about margin durability or a genuine mispricing.
The Next Catalysts I’m Tracking For NVIDIA, the tell will be whether Q2 revenue lands near the $91 billion guide without any China Data Center contribution, and how quickly Vera Rubin sampling firms up.
For Micron, I want to see FQ4 gross margin actually reach the 86% guide and confirmation that HBM4E stays on track for 2027. Analyst targets sit at $301.62 for NVDA and $1,454.12 for MU, though heavy insider selling at both names deserves a raised eyebrow.
Why I’d Split the $10,000, Leaning NVIDIA If I had to pick one, I’d lean NVIDIA for the core of the position. The platform economics, $48.55 billion in quarterly free cash flow, and the $80 billion buyback give me a stability profile Micron structurally cannot match.
That said, Micron is the more interesting swing trade. If HBM pricing holds through 2027 and the Strategic Customer Agreements do what Mehrotra claims, the forward multiple looks too cheap.
I’d size Micron smaller, treat it as a cyclical call option on AI memory, and acknowledge that a supply normalization would hit it harder than NVIDIA. If you prefer to sleep at night, tilt heavier to NVIDIA. If you want the higher-variance rebound trade, Micron earns a slot.
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Wall Street delivered one of its most unusual trading sessions of 2026. Yesterday, the Dow Jones Industrial Average climbed nearly 600 points, or 1.1%, to a record 52,900, while the Nasdaq-100 dropped almost 500 points, or 1.6%. The S&P 500 was virtually unchanged as gains in traditional industries offset weakness in technology.
On the surface, the market looked confused. In reality, it was sending a fairly clear message: Investors weren’t abandoning stocks — they were rotating into a different group of them. After years of technology dominating returns, Thursday’s action suggested leadership may finally be broadening toward sectors that have spent years in the shadows.
A Weak Jobs Report Changed the Market’s Priorities The catalyst was the Bureau of Labor Statistics’ June employment report. The economy added just 57,000 jobs during the month, well below expectations of roughly 110,000 to 130,000, while the unemployment rate held at 4.2%.
A softer labor market reduced investor fears that the Federal Reserve would need to raise interest rates again in July or September. Lower borrowing costs tend to benefit sectors that depend more heavily on financing and economic activity than rapid earnings growth.
That helped push money toward:
Sector Why it benefited Financials Lower rate pressure supports lending activity and economic growth Industrials Cheaper financing encourages business investment Consumer stocks Lower borrowing costs support consumer spending Healthcare Defensive earnings become more attractive during slower growth Those sectors account for much of the Dow’s composition. The Nasdaq-100, by contrast, remains heavily concentrated in technology, semiconductors, and artificial intelligence companies whose valuations have expanded dramatically over the past two years.
But let’s not confuse this with a bearish market signal. It was more accurately a change in leadership.
McDonald’s (NYSE:MCD), the Dow’s second-best performer, rose 4.2% and contributed another 11.6% of the index’s advance despite representing just 3.15% of the average.
Beyond those two stocks, the top performers reflected a broader shift in investor preferences. Consumer companies, industrial manufacturers, healthcare businesses, and financial firms dominated the leaderboard.
Meanwhile, many of the market’s biggest tech winners continued to cool. Semiconductor shares extended recent profit-taking after extraordinary gains throughout 2026, dragging down the Nasdaq-100 despite Apple’s strength. Weakness in names such as Micron (NASDAQ:MU) and Tesla (NASDAQ:TSLA), along with broader selling across many AI-related companies, outweighed gains elsewhere in the technology sector.
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The S&P 500 landed between those extremes because its diversified sector mix balanced gains in value-oriented industries against losses in large-cap technology.
Value Investing May Finally Be Regaining the Spotlight The bigger story extends beyond one trading session. For much of the past three years, investors had little incentive to look outside technology. Companies tied to artificial intelligence, led by Nvidia (NASDAQ:NVDA), delivered returns that left most industrial, healthcare, financial, and consumer companies behind.
Granted, one day does not establish a lasting trend. Sector rotations often fade as quickly as they begin.
Yet this one arrived alongside changing economic expectations. Slower job growth, easing concerns about additional Fed tightening, and stretched technology valuations create conditions where value stocks have historically narrowed the performance gap.
Many high-quality companies in industrials, healthcare, consumer staples, and financial services continue trading at valuation multiples well below many AI leaders despite producing consistent cash flow, growing dividends, and stable earnings.
For long-term investors, those characteristics become more attractive when leadership begins broadening beyond a handful of mega-cap technology companies.
Key Takeaway In short, Thursday’s market action was less about weakness in technology than renewed interest in the rest of the market. The Dow reached a record high because investors rotated toward sectors that have largely lagged during the AI boom, while the Nasdaq struggled under the weight of expensive technology stocks.
Investors, though, shouldn’t interpret this as a signal to abandon AI leaders altogether. Many remain exceptional businesses. But after years of tech outperforming nearly everything else, the market may finally be rewarding diversification again.
Ultimately, smart investors should pay close attention if this rotation continues. A portfolio that combines proven technology winners with undervalued industrials, financials, healthcare, and consumer companies could be better positioned if value investing is beginning its next chapter.
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Last week, the artificial intelligence (AI) community held its breath ahead of Micron Technology's (MU 5.68%) fiscal third-quarter earnings call. Both revenue and earnings per share (EPS) absolutely blew Wall Street's expectations out of the water. But interestingly enough, sales and profits weren't the most important takeaway from the report.
What most investors are overlooking is how Micron is reshaping its customer relationships. The company has implemented strategic customer agreements (SCAs) at a time when AI is driving unprecedented demand for memory and storage. These multiyear contracts provide committed volumes of DRAM and NAND while bringing higher revenue visibility and margin stability than traditional arrangements during prior boom cycles.
By shifting from transactional sales to long-term partnerships, Micron is quietly addressing the core bottleneck of matching the explosive demand for AI-driven infrastructure with reliable supply -- positioning the company for more durable financial performance in the years ahead.
Image source: Micron Technology.
Breaking down the scope of Micron's SCAs According to management, Micron has 16 SCAs across the data center, consumer, and automotive segments. To me, this is the most important figure from Micron's entire earnings report.
These agreements include four "very large customers" and three medium-sized businesses. The balance consists of smaller automotive companies. Management expects that once all the SCAs are completed, approximately half or more of the company's total revenue will stem from these agreements.
The breadth across end markets -- from AI accelerators to smartphones, PCs, and vehicles -- demonstrates that the business model applies broadly rather than being limited to a few hyperscalers.
How are Micron's SCAs structured? Micron's SCAs are structured as take-or-pay contracts with binding commitments to purchase specific volumes over multiyear terms. Most agreements last for five years, spanning calendar 2026 through the end of 2030. The smaller automotive agreements generally cover three years, however.
Management pointed out that the pricing framework includes a floor price that ensures robust gross margins well above Micron's historical peak levels, paired with a ceiling at or near current market prices for existing products. A smaller portion of the SCAs feature fixed pricing, while the rest remain subject to market conditions. Among the SCAs, 14 carry a cumulative minimum revenue commitment of approximately $100 billion over the remaining term.
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Why do Micron's SCAs matter for long-term value? Micron's SCAs fundamentally transform the company's business model by replacing cyclical spot pricing with contracted supply assurance and technology collaboration. In an environment where DRAM and NAND demand is expected to remain tight well beyond calendar year 2027, customers gain visibility into future memory availability while Micron secures predictable volumes and a floor on profit margins.
The result is significantly improved visibility into revenue, gross margins, and free cash flow -- all of which mitigate earnings volatility. The goal of the SCAs is to lock in a baseline of revenue and high-margin business through 2030, ultimately supporting higher, more predictable earnings per share, as floor pricing insulates profitability even if spot prices moderate.
This newfound predictability reduces the historical cyclical discount applied to memory stocks, supporting a more premium valuation profile for Micron over the multiyear horizon of these agreements. The combination of volume commitments and margin floors creates a more resilient earnings stream that aligns with accelerating AI infrastructure build-outs.
While smart investors understand that Micron's execution on new fab capacity and next-generation architectures remains essential, the SCAs meaningfully de-risk the company's financial outlook and reinforce its position as a transformational supplier in the AI chip value chain. In my eyes, this makes investing in Micron stock more compelling as a core position rather than a purely cyclical play to trade.
