Track market-moving stories before they get noisy

The stock market’s advance from late March through early July produced several major winners, but few were more impressive than Micron Technology ((MU - Free Report) ) and Marvell Technology ((MRVL - Free Report) ). Both stocks more than tripled from their spring lows as investors rushed into companies positioned at critical points across the AI infrastructure buildout.

Micron benefited from surging demand for high-bandwidth memory, a critical component for AI inference, the fastest growing requirement for LLMs. Memory has historically been one of the most commoditized and cyclical areas of the semiconductor industry. But as demand began overwhelming available supply, Micron found itself controlling one of the scarcest resources in the AI ecosystem. Pricing power followed, earnings estimates soared and the stock responded accordingly.

Marvell’s rally was similarly dramatic. The company was already benefiting from rapid growth across custom silicon, interconnects, switching and optical networking, which is the plumbing that allows increasingly large AI data centers to function. Then Nvidia CEO Jensen Huang added fuel to the move by identifying Marvell as a potential future trillion-dollar company.

But after extraordinary three-month runs, both stocks have reversed sharply. Micron is now more than 20% below its recent high, while Marvell has fallen more than 35%.

So, is it time to buy the pullback?

Not quite. Micron is approaching a potentially attractive setup, but Marvell likely needs more time to stabilize.

The AI Sentiment Pendulum Swings AgainI do not believe the AI boom is ending. However, it seems the narrative pendulum had swung too far toward exuberance, and periods of extreme optimism typically require a meaningful reset before the next sustainable advance can begin.

We have seen this pattern several times throughout the AI boom. Concerns about capital spending, cheaper Chinese models, declining inference costs, competitive threats and uncertain returns on investment have repeatedly triggered sharp pullbacks.

Each concern has some merit. The largest technology companies are spending unprecedented amounts on AI infrastructure, while the ultimate economics of many AI services remain uncertain. But similar doubts have emerged before, and the broader semiconductor cycle has consistently resumed its advance after expectations and positioning cooled.

The process is never as clean as a theoretical model. Sentiment moves between enthusiasm and skepticism, producing irregular peaks and drawdowns around a longer-term trend. So far, however, each major cycle within the AI trade has ultimately resolved higher.

Image Source: Zacks Investment Research

Given the size of the recent declines and the sharp reversal in sentiment, I suspect the semiconductor correction is now closer to its end than its beginning.  That does not mean the final low is already in. The group could still experience another leg lower, but much of the excess enthusiasm is leaving, and the risk-reward profile is becoming more constructive as expectations reset.

That does not mean every pullback should be purchased immediately. The underlying trend can remain intact while individual stocks decline further, consolidate for months or permanently lose leadership. Investors still need to distinguish between a durable business inflection and a stock that simply ran too far ahead of itself.

MU and MRVL Were Fundamental Rallies, Not Pure SpeculationIt is important to recognize that the advances in Micron and Marvell were supported by genuine business growth.

I highlighted both companies well before their most recent rallies. Last summer, I discussed Marvell’s compelling long-term setup following a disappointing earnings reaction in this interview. I also identified Micron as a non-consensus AI winner here near the beginning of what became an extraordinary advance.

The fundamentals subsequently exceeded even optimistic expectations.

That separates the current situation from a purely speculative bubble. Investors were not merely bidding up unprofitable companies based on distant promises. Micron and Marvell produced substantial revenue growth, rapidly improving earnings and exposure to areas of the AI supply chain where demand remains strong.

Still, even fundamentally justified rallies can overshoot. After moves of this magnitude, more air may need to come out before either stock is ready for its next sustained leg higher.

Micron’s Unbelievable Earnings GrowthMicron’s recent financial performance has been exceptional and helps explain why the stock gained so much so quickly.

In fiscal Q3 2026, ended May 28, Micron earned $25.11 per share on a non-GAAP basis, up more than 1,200% from $1.91 one year earlier. Revenue increased 346%, climbing from $9.30 billion to $41.46 billion.

Image Source: Zacks Investment Research

The company’s outlook suggested that the acceleration was not finished. Management guided fiscal Q4 revenue to approximately $50 billion, with non-GAAP earnings approaching $31 per share. Both would represent records by enormous margins.

Micron’s earnings revisions have been equally remarkable. According to Goldman Sachs, the company accounted for roughly 51% of all S&P 500 earnings-per-share revisions during the recent period it measured. That is an astounding contribution from one company and demonstrates how aggressively expectations have been repriced around memory demand.

But that concentration also creates risk.

Micron is no longer an overlooked AI beneficiary. Investors now broadly understand the high-bandwidth-memory shortage, the company’s pricing power and the scale of its earnings growth. Future gains will increasingly depend on whether Micron can continue exceeding already elevated expectations.

The company also remains exposed to the memory cycle. AI may have created something closer to a silicon super-cycle, but supply eventually responds to high prices. Customers can adjust spending, competitors can expand production and exceptionally strong margins can attract additional capacity.

Technically, Micron is now testing an important support area. The stock has not yet broken its broader uptrend, but a decisive move below that level would weaken the setup and suggest that the reset has further to run.

For investors interested in buying the pullback, Micron is the more compelling of the two stocks. However, I would still wait for evidence that support is holding and volatility is beginning to decline rather than trying to predict the exact bottom.

Image Source: TradingView

Jensen Huang’s Trillion-Dollar Call on MarvellMarvell has also delivered unusually strong growth, although its underlying inflection began well before the stock’s most recent surge.

For a time, that improvement was hidden beneath weak headline results. Total revenue barely increased from $5.5 billion in fiscal 2024 to $5.77 billion in fiscal 2025 as deep downturns in Marvell’s legacy carrier and enterprise businesses offset rapid data-center growth.

One layer beneath the headline numbers, however, the transformation was already underway.

Data-center revenue grew 88% in fiscal 2025 and represented approximately 75% of the company’s business by year-end, up from roughly 50%. Custom AI silicon entered volume production while Marvell’s electro-optics business continued supplying the connectivity required to move data across increasingly complex AI systems.

Once the weakness in the legacy businesses began to ease, the underlying growth became visible in the consolidated results.

Fiscal 2026 revenue reached a record $8.2 billion, representing growth of 42%, while data-center revenue surpassed $6 billion. Non-GAAP earnings rose 81% to $2.84 per share, and fiscal Q1 2027 revenue increased another 28%.

Image Source: Zacks Investment Research

Those results help explain why Marvell has become a prominent AI infrastructure companies. The business spans several important areas, including custom accelerators, optical connectivity, switching and data-center interconnects.

But the valuation leaves little room for disappointment.

Marvell trades at more than 50x forward earnings, although long-term earnings growth forecasts are also near 50%. That combination can support a premium multiple, but only while growth remains exceptional and execution consistently exceeds expectations.

Marvell may eventually become a trillion-dollar company, but getting there would require years of extraordinary compounding. Even at an elevated multiple, a $1 trillion valuation would imply approximately $20 billion in annual profit. That is an enormous leap from the company’s current earnings base.

For that reason, I would not treat the trillion-dollar prediction as a near-term investment thesis. It is better understood as an expression of Marvell’s strategic importance within the AI infrastructure ecosystem.

The immediate technical picture is less encouraging. Momentum has shifted decisively lower, volatility remains elevated and the stock has not yet established a clear support level. Rather than buying simply because Marvell is 35% below its high, I would wait for visible base-building, tighter trading ranges and evidence that sellers are becoming exhausted.

Image Source: TradingView

Micron Is Closer to a Buy Than MarvellBoth stocks remain tied to powerful long-term trends, but the risks are different.

Micron’s primary risk is the durability of the memory cycle. Investors must determine how long high-bandwidth-memory demand can outpace supply and whether exceptional pricing and margins can persist as production expands.

Marvell’s primary risks are valuation and execution. The company must continue converting its strong positioning in custom silicon and connectivity into earnings growth sufficient to justify a premium multiple.

Micron currently offers the more attractive setup because its earnings momentum is stronger and the stock is testing a clearly defined technical level. Marvell has experienced a more serious momentum breakdown and likely needs a longer period of stabilization.

That does not mean Micron should be purchased indiscriminately. A break below support could create another meaningful leg lower, particularly if broader semiconductor sentiment continues deteriorating.

For now, I would classify Micron as a stock to watch closely near support. Marvell remains a stock to wait on until its volatility declines and a credible base begins to form.

How Investors Can Approach MU and MRVL The recent declines in Micron and Marvell look more like sentiment resets than evidence that the AI infrastructure boom is breaking. Their rallies were supported by legitimate business growth, extraordinary earnings momentum and exposure to some of the most strategically important parts of the semiconductor industry.

But strong businesses do not automatically become attractive stocks at every price.

The narrative pendulum is now swinging away from exuberance and back toward skepticism. That process could continue for several weeks or months as investors question AI spending, future returns and whether the industry has expanded capacity too aggressively.

Micron is closer to an actionable entry, but investors should first look for support to hold and trading conditions to stabilize. Marvell carries a more demanding valuation and has suffered a more decisive technical breakdown, making patience especially important.

The larger AI opportunity likely remains intact. But after rallies of this magnitude, investors do not need to rush. MU is a watch near support, while MRVL remains a wait. A durable bottom could eventually create attractive opportunities in both, but neither stock has fully completed its reset.

​@CharlesSchwab's Nate Peterson explains the bearish case for the memory market and why Micron's (MU) performance could shape the industry's outlook. He also discusses Apple's (AAPL) partnerships with AI research labs to examine how advances in AI model compression could affect future memory demand.

Micron stock has surged over the past year but Chinese memory-chip makers could pose the biggest threat.

Shares of Micron Technology (MU +4.88%) popped on Tuesday, jumping as much as 6.2%. As of 10:40 a.m. ET, the stock was still up 3.6%.

The catalyst that sent the semiconductor specialist higher was some bullish commentary from Wall Street.

Image source: The Motley Fool.

Big price target boost Micron stock has been firmly in rally mode, gaining 675% over the past year, thanks to unrelenting demand for its memory and storage chips. Many on Wall Street believe there's still upside ahead.

KeyBanc analyst John Vinh raised his price target on Micron to $1,750 while maintaining an overweight (buy) rating on the shares. For those keeping score at home, that represents potential upside of 87% compared to Monday's closing price.

The analyst recently traveled to Asia to assess the supply chain and returned bullish. He cited strong data center demand and suggested that prices for dynamic random-access memory (DRAM) and NAND flash memory will rise by double digits through the end of the year. Moreover, he expects prices for high-bandwidth memory (HBM) to double over the coming year.

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Is he right? Memory chip stocks have tanked in recent weeks, taking a breather after a spectacular rise. Yet Wall Street remains bullish. Of the 45 analysts who have issued an opinion in July, 89% rate Micron stock a buy or strong buy, and none recommend selling.

During the company's recent earnings call, CEO Sanjay Mehrotra said that demand for DRAM and NAND chips continues to exceed supply and the company "expects tight conditions to persist beyond calendar 2027."

With that as a backdrop, it's easy to see why Wall Street is bullish. Furthermore, Micron's recent move to lock in customers to three- to five-year volume and price agreements reduces the historical boom-and-bust cycles.

And at less than 22 times earnings, Micron stock is a buy.

Danny Vena, CPA has positions in Micron Technology. The Motley Fool has positions in and recommends Micron Technology. The Motley Fool has a disclosure policy.

For years, one of the odd facts of the memory chip world is that SK Hynix (SKHY +23.59%) -- arguably the strongest player in the business -- has traded at a discount to its U.S.-listed rival, Micron Technology (MU +4.88%). Now that SK Hynix shares trade on the Nasdaq, it's worth asking whether that gap can finally close, and how much of any rerating would rest on solid ground, versus artificial intelligence (AI) enthusiasm that could just as easily cool.

The discount is real and long-standing; over more than a decade, Micron has commanded an average valuation premium of roughly 35% over SK Hynix. What's striking is that the gap has little to do with business quality. SK Hynix leads the market for the high-bandwidth memory (HBM) AI systems depend on, and its operating margin has outpaced Micron's in recent years. The discount instead reflects duller structural factors: harder access for U.S. investors, a smaller freely traded share count, and a perception that Korean companies are less shareholder-friendly. In other words, it's a plumbing problem, not a performance problem.

Image source: Getty Images.

The case that the listing narrows it That's exactly why a Nasdaq listing could help. By giving American investors a direct, liquid way to own the shares in dollars, SK Hynix removes some of the friction that kept its multiple artificially low. Listings closer to U.S. capital tend to earn richer valuations. This is the same dynamic that lets Taiwan Semiconductor Manufacturing shares trade at a premium to its home-market shares. If SK Hynix's modest forward earnings multiple drifts even partway toward Micron's, that alone would lift the stock without a single fundamental improving. On paper, the mechanical case for gap-closure is genuinely reasonable.

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Why the hype could fade Here's where I'd urge some caution, because the tidier "structural rerating" story is riding on top of a far more volatile one. A valuation gap doesn't close in a vacuum; it closes when investors feel good about the future. And the memory trade, like the broader AI trade it's fused to, is showing classic late-cycle signs. Memory stocks stumbled into a bear market just before the listing, even as one rival posted a record quarter. Well-known skeptics and research desks have warned that the shortage may have peaked around midyear, with new HBM and DRAM capacity threatening to tip the market toward oversupply by 2027 or 2028. If hyperscaler build-outs slow once the first wave of AI infrastructure is in place, demand could normalize faster than the bulls expect.

That matters enormously for the gap question, because multiples don't expand into a downturn. They compress. A listing can fix the plumbing, but it can't repeal the cycle. Should sentiment around AI memory turn, SK Hynix's discount to Micron could persist or even widen, U.S. ticker or not, simply because both stocks would be falling out of favor together.

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The analytical bottom line So can this listing close the valuation gap with Micron? Partly, and for real reasons, the structural discount tied to access and liquidity should shrink now that the shares trade in New York. But that's the smaller, steadier piece. The bigger swing factor is whether the AI-memory euphoria holds, and that's the part I'd treat with skepticism rather than faith.

My honest read is that betting on gap closure is, at heart, a bet that the memory hype doesn't fade, and history shows memory hype always fades eventually. Investors drawn to the story should separate the two threads: The listing itself is a modest, durable tailwind, while the rich valuation both companies carry is a cyclical bet that can unwind quickly. Own it for the former if you like, but don't mistake a euphoric moment for a long-term trend.

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

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

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

12 analysts revised their earnings estimate upwards in the last 60 days for fiscal 2026. The Zacks Consensus Estimate has increased $14.82 to $73.86 per share. MU boasts an average earnings surprise of +21.1%.

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

Top Wall Street analysts changed their outlook on these top names. For a complete view of all analyst rating changes, including upgrades and downgrades, please see our analyst ratings page.

Considering buying MU stock? Here’s what analysts think:

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Micron stock can keep rising well beyond its recent gains, according to KeyBanc analysts. Just look at memory-chip prices.

Six simultaneous headwinds—including an antitrust lawsuit, insider selling, Meta Compute fears and slower DRAM pricing momentum—drove sentiment lower without materially changing Micron's earnings outlook. Micron has already sold out HBM production through 2027, while Samsung and SK hynix continue operating at exceptionally high utilization rates amid persistent AI memory shortages. Multi-year Strategic Customer Agreements are replacing volatile spot pricing, improving revenue visibility, and transforming memory into a more predictable AI infrastructure business.

SK Hynix (HXSCL), South Korea's memory-chip manufacturer and the world's second-largest supplier of DRAM, has raised $26.5 billion from the U.S. stock market in

The highly anticipated U.S. trading debut of SK Hynix NASDAQ: SKHY delivered on its initial promise by pricing at $158.14 and raising an unprecedented $28.1 billion on July 10. Shares quickly gapped above $170 as early buyers scrambled for exposure to the global leader in high-bandwidth memory (HBM). Gravity quickly took hold. A localized wave of macroeconomic selling across Asian semiconductor assets pulled the newly minted American depositary receipts down by more than 7% intraday, pushing the price below $155 by midday Monday.

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Separating Friction From FundamentalsSK hynix Today$152.96 -15.05 (-8.96%)

As of 04:00 PM Eastern

52-Week Range$151.30▼

$177.00 At first glance, a busted initial public offering (IPO) of this magnitude stings retail buyers who bought the early morning gap.

When an offering creates this much initial friction, it pays to step back and evaluate the broader machinery at play.

The early price action reveals a transient liquidity event rather than a structural deterioration in end-market demand.

Early venture capital holders, retail traders, and cross-border arbitrageurs took liquidity off the table following the opening surge, creating a mechanical drop disconnected from the actual business fundamentals.

Separating Trading Volume From TrendUnderneath the daily volatility of the broader semiconductor index, hyperscalers are quietly absorbing fabrication capacity out through 2027. While retail liquidity exits, institutional block buying volume is actively aggregating near the $150 to $155 support levels for SK Hynix. These institutional buyers recognize a stark discrepancy between the localized sell-off in Asian tech equities and the contracted reality of the artificial intelligence hardware supply chain.

This dynamic creates a rare window. When an asset class dominates the financial narrative, distinguishing between a short-term trading vehicle and a long-term compounder becomes essential. The post-IPO sell-off offers an asymmetric accumulation window for the memory oligopoly, presenting an opportunity for investors willing to look past short-term regional macroeconomic headwinds and focus on the physical constraints of chip manufacturing.

Engineering an Unsolvable Supply CrunchThe primary growth engine for modern memory makers is a multi-year imbalance between supply and demand in HBM manufacturing. Producing these advanced chips is not like churning out standard flash storage. The process mandates intensive capital expenditure, complex packaging dependencies, and significantly lower initial yields.

Integrating these vertical memory stacks directly alongside GPUs requires specialized through-silicon vias and advanced bonding techniques. Every time a new generation of logic chips launches, the memory architecture must also evolve, continuously resetting the manufacturing learning curve and keeping supply artificially tight.

SK Hynix leadership utilized the IPO roadshow to outline a severe, multi-year memory supply crunch expected to persist beyond 2030. The South Korean manufacturer strategically pulled forward the sampling timeline for its advanced HBM4E chips to June 2026.

This accelerated schedule is explicitly designed to qualify for next-generation platforms such as NVIDIA's NASDAQ: NVDA Rubin Ultra, effectively locking out non-incumbent competitors from the supply chain. The fresh capital generated from the U.S. listing provides immediate funding for massive fabrication expansions, such as the transition to 400-layer hybrid bonding, without forcing SK Hynix to rely on expensive debt markets.

Advance Payments and the End of CyclicalityWhile SK Hynix executed a near-monopoly over the initial wave of AI hardware buildouts, the landscape is actively recalibrating. The HBM market is maturing into a highly fortified triopoly. Recent qualification and capacity ramps by competitors have compressed SK Hynix’s market share from an estimated 69% in early 2025 to approximately 56%-58% by the second quarter of 2026. This fundamental shift contextualizes the recent SK Hynix price reversion as a transition from monopoly premiums to triopoly realities, with Samsung OTCMKTS: SSNLF and Micron Technology NASDAQ: MU capturing the remaining market share.

Micron Technology Today

MU

Micron Technology

$936.18 -43.12 (-4.40%)

As of 04:00 PM Eastern

52-Week Range$103.38▼

$1,255.00Dividend Yield0.06%

P/E Ratio21.19

Price Target$1,263.76

Micron Technology is rapidly advancing its competitive position in this structural deficit. The Idaho-based producer is currently mass-producing 48-gigabyte HBM4 stacks capable of exceptional data transfer speeds.

To support this growth, Micron authorized a 10-year, $250 billion domestic investment outlook to build U.S.-based cleanrooms. Operating with a price-to-earnings ratio of around 21, Micron trades at a relative discount to pure-play logic peers despite structurally expanding margins.

The critical evolution in the memory sector is the shift toward revenue de-risking. Hyperscalers and logic designers are issuing unprecedented advance payments to memory makers to secure fabrication capacity. Both Micron Technology and SK Hynix have fully sold out their high-bandwidth capacity through 2026 and heavily into 2027. This visibility largely decouples near-term EBITDA from traditional boom-and-bust memory cycles. It strips hyperscalers of traditional buyer leverage, transferring structural pricing power directly to the memory suppliers.

The Institutional Accumulation WindowDespite these fortified contractual moats, broader sector weakness has created pockets of extreme sentiment in the derivatives market. Micron presents a highly unusual profile right now. Shares recently traded lower, down by over 5% intraday to drop below the $930 level, largely in a sympathy sell-off following the SK Hynix debut.

Micron Technology, Inc. (MU) Price Chart for Monday, July, 13, 2026

With put-to-call open interest ratios recently peaking near 10 ahead of upcoming earnings reports, Micron's options chain reveals heavy bearish positioning. Such extreme levels of bearishness often serve as a contrarian indicator, creating a compelling setup for a potential short-squeeze against prevailing macroeconomic headwinds.

When combining the retail exodus from SK Hynix post-IPO with the aggressive put accumulation in Micron Technology, a clear institutional accumulation blueprint emerges. The physical bottlenecks limiting supply are real, persistent, and not easily resolved by simply injecting more capital into the system.

Advanced packaging dependencies, such as the chip-on-wafer-on-substrate process utilized by key foundry partners, severely constrain the elasticity of memory supply. These constraints ensure that spot prices for HBM will remain elevated even if broader logic chip demand experiences minor, localized fluctuations.

Investors' Blueprint for the Memory OligopolyThe divergence between localized equity sell-offs and the multi-year capacity contracts secured by memory manufacturers creates a distinct valuation mismatch. Rapid generational leaps in memory architecture are effectively creating a closed ecosystem, locking out emerging challengers and solidifying the pricing power of the current triopoly. As long as hyperscaler capital expenditures remain robust, the scarcity premium embedded in these manufacturers appears structurally sound.

A potential risk to this thesis remains an industry-wide slowdown in data center construction or faster-than-expected yield improvements in upcoming fabrication lines. If production yields for advanced hybrid bonding normalize earlier than anticipated, the projected 2027 supply constraints could ease, potentially compressing the premiums currently priced into the sector. Investors may want to monitor institutional accumulation patterns in both SK Hynix and Micron Technology around current support levels to gauge the strength of the structural deficit narrative before taking a position.

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Remember when spending billions on chip fabs and AI data centers was the hottest thing in tech? That was last week. By Monday morning, investors had moved on to companies that make money without building small cities full of servers.

The tech-heavy Nasdaq Composite (^IXIC 1.42%) index fell 0.7% by 11:16 a.m. ET, while the broader S&P 500 (^GSPC 0.74%) and Dow Jones Industrial Average (^DJI 0.31%) held their losses to 0.3% and 0.2%, respectively.

^DJI data by YCharts

Two themes dominated this morning's headlines. Chip stocks extended losses following a historic collapse in Korean markets, while President Trump proposed charging a 20% toll on ships passing through the Strait of Hormuz.

Circuit breakers in Seoul and renewed Hormuz blockage The semiconductor sell-off began overnight in Seoul, where SK Hynix plunged 15% in its worst day on record. The broader KOSPI index fell 5.5%, triggering circuit breakers for the 35th time this year. That's more than the 26 times Korean markets halted trading during the entire 2008 financial crisis.

U.S.-listed shares of SK Hynix (SKHY 6.72%) fell 8.4%, dropping below Friday's $149 IPO price. American memory chip rival Micron Technology (MU 5.33%) fell 4.3%, connecting the Korean crash to U.S. indexes. Most semiconductor stocks are down and only a handful of software names are trending up. As a result, 17 of the 20 largest Nasdaq Composite moves are printed in red ink right now.

Image source: Getty Images.

Apple (AAPL +0.50%) gained 0.9%, one of the few mega-caps providing bullish support, but its $44 billion in additional market cap couldn't offset larger cap losses from Micron, Nvidia, and Space Exploration Technologies.

In the Iranian conflict, the ceasefire has collapsed and negotiations have stalled. Both sides are claiming full control of the Strait of Hormuz, shipping traffic through this critical area is essentially zero, and oil prices are up more than 3% today. Energy stocks are up, data center construction plays are fizzling today, and the Dow is quite balanced. I see 15 upticks and 15 downticks among its 30 hand-picked components.

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Earnings season arrives at an awkward moment The semiconductor sell-off leads up to the start of third-quarter earnings season. Major banks including JPMorgan Chase (JPM 0.59%), Bank of America (BAC 0.60%), and Goldman Sachs will report their second-quarter results this week. Netflix (NFLX +1.44%), Johnson & Johnson (JNJ +0.38%), and UnitedHealth Group (UNH +1.06%) are also prepping their financial statements. Tech giants will follow over the next couple of weeks.

The timing is either perfect or terrible, depending on your perspective. If chip companies report strong results and optimistic guidance, the ongoing downturn could reverse quickly. If they disappoint or sound cautious about future spending, things will get uglier.

For now, investors seem content to wait for actual data. This volatile moment doesn't look like a good time to bet on billion-dollar data center spending that hasn't proven its economic value yet.

Bank of America is an advertising partner of Motley Fool Money. JPMorgan Chase is an advertising partner of Motley Fool Money. Anders Bylund has positions in Micron Technology, Netflix, Nvidia, and UnitedHealth Group. The Motley Fool has positions in and recommends Apple, JPMorgan Chase, Micron Technology, Netflix, and Nvidia. The Motley Fool recommends Johnson & Johnson and UnitedHealth Group. The Motley Fool has a disclosure policy.

South Korea's stock market has climbed around 80% this year to a series of record highs, but the rally has created an unusual investment backdrop as valuations

Two Nvidia Suppliers, One AI OpportunityBoth companies are key suppliers of high-bandwidth memory (HBM), the specialized chips powering Nvidia Corp.‘s (NASDAQ:NVDA) latest AI accelerators.

Both are benefiting from soaring demand for AI servers. Both have become trillion-dollar companies. And both are investing aggressively to expand production as hyperscalers race to build more AI infrastructure.

The question for investors is no longer whether AI memory is a compelling theme. It’s which stock offers the better way to play it.

How the Valuations CompareAt first glance, the two companies look more evenly matched than many investors might expect.

Source: Benzinga Pro data

*P/E figures for SKHynix calculated using publicly available EPS and market data, as Benzinga Pro does not currently display these metrics for this comparison.

The comparison shows just how closely the market is valuing the two AI memory leaders. Micron trades at a slightly lower trailing earnings multiple and price-to-sales ratio, while SK Hynix carries the lower EV-to-EBITDA multiple.

Where Micron Has the EdgeMicron remains one of Wall Street’s strongest AI momentum stories.

Its Value score of 27.85, however, suggests investors are already paying a premium for that growth story.

What SK Hynix Brings to the TableSK Hynix arrives on Nasdaq with a different advantage.

The company is widely viewed as the global leader in high-bandwidth memory and has established itself as one of Nvidia’s most important HBM suppliers. Its U.S. listing gives American investors direct access to that business without buying shares on the Korea Exchange.

While Benzinga Edge rankings are not yet available following the company’s U.S. listing, its valuation metrics suggest investors are assigning a premium comparable to Micron’s rather than treating it as a discounted alternative.

The AI Memory Trade Just Got More CompetitiveSK Hynix’s Nasdaq debut isn’t just another semiconductor IPO. It expands the investment universe for one of AI’s fastest-growing markets.

Micron still offers the familiarity of an established U.S.-listed AI winner with strong momentum and a forward earnings multiple of roughly 6.3x.

SK Hynix, meanwhile, gives investors exposure to one of the industry’s dominant HBM manufacturers at valuation levels that are remarkably similar to Micron’s.

For investors, that may be the biggest takeaway. The AI memory trade is no longer a one-stock story. It has become a two-stock debate, with Wall Street now weighing whether execution, valuation or market leadership will matter most as AI spending enters its next phase.

Image via Shutterstock

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Growth investors focus on stocks that are seeing above-average financial growth, as this feature helps these securities garner the market's attention and deliver solid returns. But finding a growth stock that can live up to its true potential can be a tough task.

In addition to volatility, these stocks carry above-average risk by their very nature. Also, one could end up losing from a stock whose growth story is actually over or nearing its end.

However, the task of finding cutting-edge growth stocks is made easy with the help of the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the traditional growth attributes to analyze a company's real growth prospects.

Micron (MU - Free Report) is one such stock that our proprietary system currently recommends. The company not only has a favorable Growth Score, but also carries a top Zacks Rank.

Studies have shown that stocks with the best growth features consistently outperform the market. And returns are even better for stocks that possess the combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy).

While there are numerous reasons why the stock of this chipmaker is a great growth pick right now, we have highlighted three of the most important factors below:

Earnings GrowthArguably nothing is more important than earnings growth, as surging profit levels is what most investors are after. And for growth investors, double-digit earnings growth is definitely preferable, and often an indication of strong prospects (and stock price gains) for the company under consideration.

While the historical EPS growth rate for Micron is 15%, investors should actually focus on the projected growth. The company's EPS is expected to grow 791% this year, crushing the industry average, which calls for EPS growth of 57.1%.

Cash Flow GrowthCash is the lifeblood of any business, but higher-than-average cash flow growth is more beneficial and important for growth-oriented companies than for mature companies. That's because, high cash accumulation enables these companies to undertake new projects without raising expensive outside funds.

Right now, year-over-year cash flow growth for Micron is 101.9%, which is higher than many of its peers. In fact, the rate compares to the industry average of 23.9%.

While investors should actually consider the current cash flow growth, it's worth taking a look at the historical rate too for putting the current reading into proper perspective. The company's annualized cash flow growth rate has been 14.7% over the past 3-5 years versus the industry average of 10.2%.

Promising Earnings Estimate RevisionsSuperiority of a stock in terms of the metrics outlined above can be further validated by looking at the trend in earnings estimate revisions. A positive trend is of course favorable here. Empirical research shows that there is a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

The current-year earnings estimates for Micron have been revising upward. The Zacks Consensus Estimate for the current year has surged 23.1% over the past month.

Bottom LineMicron has not only earned a Growth Score of A based on a number of factors, including the ones discussed above, but it also carries a Zacks Rank #1 because of the positive earnings estimate revisions.

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

This combination positions Micron well for outperformance, so growth investors may want to bet on it.

Key Takeaways Memory stocks and DRAM ETF fell 20% , but AI-driven demand and supply shortages remain intact.AI valuations face pressure as debt-funded spending rises and investors seek stronger returns.Long-term AI and Agentic AI growth could make the memory sell-off a dip-buying opportunity. The AI-driven memory trade has stumbled, with leading memory stocks and ETFs slipping into bear-market territory on July 7, 2026. Shares of Micron (MU - Free Report) , Samsung Electronics, SK Hynix and the Roundhill Memory ETF (DRAM - Free Report) have all fallen more than 20% from their recent closing highs, marking a sharp reversal in one of 2026's strongest market themes, as quoted on Yahoo Finance.

The downturn has come despite Samsung reporting record financial results, highlighting investors' growing reluctance to reward even exceptional earnings.

Semiconductor Sell-Off WidensSemiconductor companies tracked by Yahoo Finance have collectively lost about $1.5 trillion in market value since June 25, based on Tuesday's intraday prices. Micron alone has shed nearly $350 billion in market capitalization during that period, the same article revealed.

Several other major chip companies — including SanDisk, Intel, Applied Materials and Lam Research — have each lost more than $100 billion in market value.

The decline has also broadened across the sector, with at least 25 semiconductor stocks falling more than 20% since June 25. Among the notable decliners are Western Digital, Seagate, Teradyne, ON Semiconductor and GlobalFoundries, the article went on to highlight.

AI Overvaluation: A Concern? Investor sentiment appears to be shifting. Expectations have become more demanding, and the market is requiring stronger catalysts to justify premium valuations. Returns on AI spend are failing to meet expectations.

Trillions have been invested in the AI theme. Soaring valuations in AI stocks have triggered worries that Wall Street may be inflating another speculative bubble.

Debt-Fed AI Investments The role of debt is also important in the current AI play. To finance aggressive AI infrastructure spending, tech giants including Nvidia, Oracle, Alphabet and Meta have raised capital through debt and equity offerings in recent months.

Amazon plans to raise at least $25 billion through a bond sale, sources told CNBC’s David Faber. It marks the company’s latest debt raise as it looks to support its massive investments in AI. Amazon's debt sale follows about $64 billion in bond raises earlier this year across the United States, Europe and Canada, after a $15 billion U.S. offering last November.

Ray Dalio, founder of Bridgewater Associates, cautioned that the current AI boom will likely lead to bursting bubbles, reminding us of the historical patterns of technological revolutions and the role of debt, as quoted on StartupHub.ai.

Should You Buy the Dip?Despite the recent correction, the broader AI memory trade remains well ahead of where it stood earlier this year. Since late March, the group has still posted a median gain of nearly 60% and added close to $5 trillion in market value, per Yahoo Finance.

Record Earnings of SamsungSamsung's latest results were far from disappointing. The company projected operating profit of about $59 billion and revenues of roughly $113 billion — both record-breaking figures.

SK Hynix Listing Could Be the Next CatalystAttention now turned to SK Hynix's U.S. IPO. Its shares jumped about 13% on the first day of trading, as quoted on Yahoo Finance. The stock climbed to $168 after pricing its American depositary receipts (ADRs) at $149 apiece. The company raised approximately $26.5 billion through the offering, making it the largest U.S. IPO ever by a foreign company, according to Bloomberg data, as mentioned on Yahoo Finance.

Memory Shortage Still in Play The AI-driven memory shortage may still be intact, but the recent sell-off suggests that investors are becoming less willing to overlook rich valuations. Per IDC, server demand continues to grow faster than the supply.  

On the demand side, AI infrastructure is mainly responsible for the shortage. GPU servers are expanding at a pace that captures memory capacity before supply can rebalance.

On the supply side, manufacturing discipline is probably causing the crunch as manufacturers seek to avoid a glut and the resulting crash in memory prices. Major memory manufacturers are now letting pricing reflect dearth, per IDC.

The Agentic AI BoomAgentic AI is growing rapidly and will require complex orchestrations and massive memory retrieval. The Agentic AI Orchestration and Memory Systems market is expected to witness a 35% CAGR during the forecast period (2026-2033), as quoted on Skyquest.com.

ETFs to Play Against this backdrop, investors can tap the dearth of enough memories in the market and the global AI boom with ETFs like Tema Memory ETF (DISK - Free Report) and DRAM. While DISK is a newbie, DRAM is up 33% this year. The fund DRAM has given a flat performance over the past month.

Key Takeaways Micron has signed 16 long-term supply agreements covering key DRAM and NAND volumes.Take-or-pay terms and pricing bands aim to soften market swings and stabilize margins and cash flows.Fourteen agreements represent about $100 billion in minimum revenues, backed by $22 billion in commitments. Micron Technology, Inc. (MU - Free Report) is reshaping its business model through long-term supply contracts that aim to reduce the earnings volatility typical of the memory industry. With artificial intelligence (AI) driving unprecedented demand for DRAM and NAND, these agreements could provide greater revenue visibility while supporting stable margins and stronger cash flows.

By the end of the third quarter of fiscal 2026, the company signed 16 Strategic Customer Agreements (SCAs) spanning data center, consumer and automotive markets. These contracts currently cover roughly 20% of Micron's DRAM volume and about one-third of its NAND volume over the contract period. Management expects these agreements to eventually account for half or more of total company revenues, significantly increasing the predictability of future sales.

The SCAs are structured as take-or-pay contracts, requiring customers to purchase committed volumes over multiple years. Most agreements include pricing bands with defined floor and ceiling prices, reducing the impact of sharp market swings while allowing pricing to adjust within agreed limits. Fourteen of the signed agreements represent approximately $100 billion in minimum contracted revenues over the remaining contract term. Customers have also committed about $22 billion through cash deposits and related financial commitments, highlighting confidence in Micron's long-term supply strategy.

These agreements come as AI-driven demand continues to outpace industry supply. Micron expects tight DRAM and NAND market conditions to extend beyond calendar year 2027, supported by limited wafer capacity and slower technology transitions. Combined with strong demand for HBM, data center SSDs and advanced memory products, the company's contract-based model should improve revenue visibility.

While memory remains a cyclical industry, these long-term supply agreements could make Micron's financial performance more stable than in previous cycles. The Zacks Consensus Estimate for fiscal 2026 revenues is currently pegged at $126.66 billion, indicating a robust $238.9% year-over-year surge.

How Do MU's Rivals Compare on Long-Term Revenue Visibility?Micron's closest U.S.-listed competitors are Western Digital Corporation (WDC - Free Report) and Seagate Technology Holdings Plc (STX - Free Report) , though both focus primarily on storage rather than DRAM memory. Like Micron, they are benefiting from the AI-driven surge in enterprise storage demand, but their revenue visibility relies more on long-term cloud customer relationships than formal multi-year supply contracts.

Western Digital has seen strong demand for its enterprise SSDs and high-capacity HDDs, supported by AI data center investments and growing cloud deployments. The company expects continued growth as hyperscalers expand storage infrastructure for AI workloads. Western Digital’s third-quarter fiscal 2026 revenues rose 45% year over year to $3.34 billion.

Seagate is also capitalizing on the rising demand for mass-capacity storage. Its Mozaic platform, based on heat-assisted magnetic recording (HAMR) technology, enables higher-capacity hard drives that help customers lower storage costs. In the last reported financial results for the third quarter of fiscal 2026, Seagate’s revenues jumped 44% year over year to $3.11 billion.

Nonetheless, unlike Micron's take-or-pay SCAs that lock in committed purchase volumes, Western Digital and Seagate remain more exposed to fluctuations in enterprise storage spending and hard drive pricing. This gives Micron an advantage in revenue visibility, especially as its multi-year agreements provide committed demand, pricing discipline and stronger cash flow predictability during periods of tight memory supply.

Micron’s Price Performance, Valuation and EstimatesShares of Micron have surged around 243.1% year to date compared with the Zacks Computer and Technology sector’s return of 16.9%.

Micron Technology YTD Price Return Performance
Image Source: Zacks Investment Research

From a valuation standpoint, MU trades at a forward price-to-earnings ratio of 6.90, significantly lower than the sector’s average of 24.80.

Micron Technology 12-Month Forward P/E Ratio
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Micron’s fiscal 2026 and 2027 earnings implies a year-over-year increase of 791% and 107%, respectively. Bottom-line estimates for fiscal 2026 and 2027 have been revised upward in the past 30 days.

Image Source: Zacks Investment Research

Micron currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Micron (MU 4.38%) stock slid 3.9% through 11:05 a.m. ET as investors caught a case of the Mondays -- and resumed worrying about the durability of high prices for memory chips used in the artificial intelligence industry.

Image source: Micron.

The SK Hynix "IPO" South Korea's SK Hynix (SKHY 8.95%), now trading on Nasdaq as an American Depositary Receipt, is the likely catalyst for today's decline in Micron's price. SK shares soared 14% on their Nasdaq debut before turning tail this morning and selling off by more than 6%. Micron stock is following SK stock lower, and it's not too hard to understand why.

When SK debuted, its CEO stated confidently that the global market for computer memory will face its "worst-ever supply shortage" next year, and supply will remain low (and prices high) through 2030 and beyond.

This sounds like good news for Micron, which is enjoying windfall profits from these high prices right now. Problem is, SK competes with Micron, it's the dominant player in high-bandwidth memory (50% to 60% market share) and a bigger player in plain vanilla DRAM memory as well, with 29% market share -- more than Micron has.

Today's Change

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What this means for Micron stock This position allows SK Hynix to set prices in the HBM and DRAM markets -- which is fine for Micron for now, as prices are high. But SK is working to double its DRAM production by 2030, which will increase supply and presumably lower prices. Worse, SK Hynix's Nasdaq debut just netted it $26.5 billion in new stock sales, giving it ample funds to proceed with (or even accelerate) its expansion plans.

This will be bad news for Micron, costing it both profits and market share. This is the reason Micron stock is going down today.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology. The Motley Fool has a disclosure policy.

Investors looking ahead to when the high-bandwidth memory (HBM) shortage will end can start looking a little further out. Micron’s NASDAQ: MU response to SK Hynix's bold U.S. entry reveals that HBM shortages persist and will likely linger into the next decade (as indicated by the SK Hynix CEO), and that both companies are scrambling to ramp production.

Micron Technology Today

MU

Micron Technology

$936.80 -42.50 (-4.34%)

As of 12:15 PM Eastern

This is a fair market value price provided by Massive. Learn more.

52-Week Range$103.38▼

$1,255.00Dividend Yield0.06%

P/E Ratio21.24

Price Target$1,263.76

While SK Hynix will use its IPO funds to bolster U.S. capacity, Micron is using its robust cash flow and financial position to do the same. The company upped its planned 10-year investment outlook to $250 billion domestically, money to be spent on U.S.-based fabrication capacity and HBM technology advancement.

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The battle is for market share. SK Hynix commands a lion’s share of the market due to its close ties with NVIDIA NASDAQ: NVDA, but its dominance isn’t assured. Micron, for its part, is working to align more closely with NVIDIA’s standards to carve out a larger share of business from this single client.

Meanwhile, Micron is capturing a significant share of the second-tier AI infrastructure market, including Amazon NASDAQ: AMZN, which uses HBM for its Trainium chips, Alphabet NASDAQ: GOOGL, which uses it for its Tensor Processing Units, and Microsoft NASDAQ: MSFT, which uses HBM for its Maia architecture. Looking ahead, Micron is expected to benefit from the dual tailwinds of high demand, fixed-cost leverage, and pricing power for many years.

The latest news in DRAM and HBM sales is that price caps are being lifted or removed from long-term contracts, opening the door to maximum pricing power. While Micron has yet to follow suit, similar moves are possible. Until then, Micron is sitting pretty, providing an in-demand product with a multiyear sales bump underway and an updraft in pricing power.

Analysts Take Note, Micron Sends Strongly Bullish SignalAnalysts responded favorably to the $250 billion spending plan, with chatter highlighting the investment boost as a strongly bullish signal, reaffirming AI demand and the extended memory upcycle. Long-term revenue visibility translates not only into growth stability, but also into cash flow and capacity for capital returns.

As it stands, Micron’s dividend is a token but ultra-reliable, and the buyback program is in position for robust future increases. Among the catalysts for share prices is the potential for buybacks to start reducing the share count in the not-too-distant future.

Until then, MarketBeat tracks 38 analysts who rate Micron stock as a consensus Buy, with a 92% Buy-side bias. The trends include steady coverage, firming sentiment, and robust price target increases, with consensus forecasting nearly 30% upside as of mid-July and the high-end pegged at $2,000. The $2,000 target is significant, as it represents more than 100% upside from the mid-July trading levels and may be reached within a matter of quarters.

Institutional activity suggests the downside risk is limited in Q3. The group owns more than 80% of the stock and has bought on balance over the trailing 12 months, accelerating buying in early Q3. The early Q3 balance is greater than $2-to-$1, providing a solid support base, and is likely to remain strong, given the trends, outlook, and increased spending plans. The risk from this vector is that this group sells into the rally as the price advances, but there is little sign of that now. With analysts raising targets and the outlook strengthening, institutional support is likely to remain solid for the foreseeable future.

Triple-Digit Upside for Micron: Near, Mid, and Long-TermMicron’s valuation metrics suggest a robust upside potential in the near-, mid-, and long-term. The stock trades at a paltry 12x its current-year earnings guidance, a multiple that is lower than that of AI-critical peers and the S&P 500, which trade at least 100% higher relative to their earnings. Looking ahead, the valuation falls to about 6x as soon as the subsequent year, suggesting another 100% upside is possible within the next two to three quarters. Longer-term, the estimates fail to account for the extended HBM shortage, setting the stage for a persistent, robustly bullish cycle of analyst revisions that may last several years.

Micron’s early July price pullback is an opportunity in this scenario. While the 25% price correction is alarming, it’s a small move for this market, which remains up by approximately 700% on a trailing 12-month basis. The more critical chart detail is the preceding peak and its accompanying MACD convergence, a signal of market strength suggesting fresh highs will be set. The only question is the timing of the move, and it may be triggered soon. Micron is slated to report its fiscal Q4 results in late September, but releases from NVIDIA, the Mag Seven, and AI-critical hyperscale providers can also do the trick by affirming demand and spending trends are intact.

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Key Takeaways Micron's AI memory business is benefiting from strong demand, supply shortages and rising HBM pricing.MU forecast fiscal Q4 2026 revenue of about $50B and adjusted EPS of $31, above consensus estimates. Micron plans major U.S. investments through 2035 to expand AI memory capacity and secure silicon supply. Micron Technology Inc. (MU - Free Report) witnessed a meteoric rise in its stock price in the first half of 2026, rallying nearly 340%. On June 24, the company posted blockbuster third-quarter fiscal 2026 earnings results, crushing all estimates. 

As a result, on June 25, shares of MU touched an all-time high of $1,255. Thereafter, the stock has seen a gradual decline and is currently in the bear-market territory plunging 22% from its all-time high. However, the recent softness in the stock price has opened a tremendous opportunity for both short and long-term investors. 

The chart below shows the price performance of MU in the past month.

Image Source: Zacks Investment Research

Excellent Business Opportunity Micron has been benefiting tremendously from the enormous application of AI in day-to-day life, which has pushed up the demand for memory chips. The four major hyperscalers raised their AI capital expenditure budget to $750 billion for 2026. This figure is set to cross $1 trillion next year and is likely to rise further beyond 2027. 

This has resulted in more AI semiconductor sales, implying the need for multiple AI memory chips to operate. Flash memory technologies like DRAM and NAND are used in AI chips, enabling them to perform optimally. 

This has pushed up the demand for AI-enabled memory chips. In their last earnings reports, all four major hyperscalers highlighted a shortage of memory and storage chips, resulting in soaring prices of these products. As a result, MU benefits significantly. 

Micron’s CEO, Sanjay Mehrotra, said, “Our customers are recognizing that supply shortages in memory and storage will take considerable time to improve, even as we expect industry supply to improve gradually in 2028.”

Solid Estimate RevisionsMicron has an expected revenue and earnings growth rate of more than 100% each, for the current year (ending August 2026). The Zacks Consensus Estimate for the current year’s earnings has improved 22.6% over the last 30 days. 

MU has an expected revenue and earnings growth rate of 87.8% and more than 100%, for the next year (ending August 2027). The Zacks Consensus Estimate for next year’s earnings has improved 44.3% over the last 30 days. 

Image Source: Zacks Investment Research

Image Source: Zacks Investment Research

Micron’s gross margin climbed to 84.9% in the third quarter from 74.9% in the prior quarter and 39% in the year-ago period. This proved how high-bandwidth memory (HBM) shortage is helping these high-end memory developers to increase prices in a world of AI-powered data center boom. Likewise, the Zacks Consensus Estimate for 2027 EBITDA margin has shown steady improvement since mid-May.

Image Source: Zacks Investment Research

New Tech Trends to Drive ProspectsThe performance of any AI model depends on memory performance and capacity. MU’s HBM is a highly sought-after product for NVIDIA Corp. (NVDA - Free Report) , Advanced Micro Devices Inc. (AMD - Free Report) and Alphabet Inc. (GOOGL - Free Report) to name a few, for their AI-enabled chipsets.

Micron has meaningful exposure to AI, cloud data centers, industrial IoT and autonomous vehicles, all of which require increasingly advanced memory solutions. As AI adoption accelerates, demand for DRAM and NAND products continues to rise. 

NVIDIA identified Micron as a key HBM supplier for its GeForce RTX 50 Blackwell GPUs, reinforcing its importance within the AI supply chain. Demand for HBM4 is also benefiting from next-generation AI infrastructure deployments, including NVIDIA’s Vera Rubin platform. 

On July 8, Reuters reported that Micron has decided to invest more than $250 billion in the United States through 2035. The company’s original investment plan was $170 billion, which it raised to $200 billion in June. 

Moreover, MU also unveiled its plan to invest $3 billion in GlobalWafers' silicon wafer manufacturing operations in Texas. The two companies plan to enter a 10-year deal to ensure a long-term supply of raw silicon wafer capacity to the AI memory chip behemoth.

Strong Guidance Micron anticipates revenues of $50 billion (+/1 billion) in the fiscal fourth quarter of 2026. Operating expenses on a non-GAAP basis are estimated to be approximately $1.65 billion. Adjusted EPS is anticipated to be $31.00 (+/- $1.00). 

Attractive Valuation Despite a robust rally, the MU stock still looks very attractive. It trades at a forward 12-month price-to-earnings (P/E) multiple of 13.43, which is significantly lower than the industry average of 27.73. This discount adds to the appeal for long-term investors.

MU trades at a price-to-sales (P/S) multiple of 12.41, compared with the industry average of 10. Further, it trades at a price-to-book (P/B) multiple of 11.12, compared with the industry average of 8.40. These two multiples warrant premiums due to the company’s dominant position in the AI HBM and DRAM markets.

Huge Price Upside PotentialThe current Zacks Consensus average price for Micron is based on short-term price targets offered by 33 analysts. The short-term average price target of brokerage firms represents an increase of 52.2% from the last closing price of $979.30. 

The brokerage target price is currently in the range of $2,000-$470. This indicates a maximum upside of 104.2% and a maximum downside of 52%. The risk/reward ratio is highly favorable 1:2. 

Image Source: Zacks Investment Research

What Next for MU?Micron currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

MU has invested heavily in next-generation memory technologies, positioning itself to meet the growing performance and efficiency requirements of AI ecosystems. MU’s position in the AI ecosystem continues to strengthen. 

Micron Technologies represents an opportunity to invest in a company with substantial unrealized potential in the AI revolution. At this stage, it will be prudent to buy MU on every dip. Hold this stock for the long term as the astonishing growth potential of the global AI-powered data centers and MU’s strong guidance and business visibility are likely to generate more value.

Artificial intelligence (AI) needs compute in order to develop and be put to use, and this has powered the share prices of chip designers from Nvidia to Advanced Micro Devices. They make the logic chips, such as graphics processing units (GPUs) and central processing units (CPUs), that fuel key AI tasks.

But logic chips aren't the only crucial ingredient in the AI story. Along with these, AI also requires memory and storage, elements provided by companies including Micron Technology (MU 1.05%), SK Hynix, and Sandisk (SNDK +3.10%). In fact, as AI platforms are now applied to real-world problems, the need for memory has become greater than ever.

All of this has buoyed the stock prices of these memory market leaders. Micron and Sandisk have soared nearly 700% and almost 4,000%, respectively, over the past year. And SK Hynix of South Korea just splashed onto the U.S. market, debuting on the Nasdaq on July 10. In their first day of trading, the American depositary receipts (ADRs) jumped 13%.

It's no surprise that investors now are asking: Will these memory giants continue to roar higher? History offers a strikingly clear answer.

Image source: Getty Images.

The importance of memory chips So, first, let's consider the path of these players and the general AI market environment. Micron, SK Hynix, and Sandisk each offer the various types of memory needed across devices and industries. Memory chips are found in everything from smartphones to laptops, so they are broadly used in consumer products -- and today, AI data centers have become massive memory chip customers, driving prices higher and supply lower.

All of this has been a boon to memory chip leaders, with demand so high that each of these players has seen tremendous growth in earnings and stock price. For example, in the recent quarter, Micron reported a 345% increase in revenue to $41 billion and data center gross margin of 87%. And the company expects tight supply to continue beyond 2027 amid high AI demand.

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SK Hynix and Sandisk have delivered similar messages as the data center demand for chips increased. And logic chip designers such as Nvidia have confirmed this pattern. Today, AI is shifting into the phase of agentic AI -- this is use of AI to handle real-world problems, and AI needs more and more memory and storage power to get the job done. So we actually could see an acceleration of memory demand in this stage of the AI growth story.

A cyclical past So does this mean memory stocks have much farther to run? Let's look to history for some clues. Memory stocks are cyclical: Demand rises, manufacturers increase output, supply returns, demand and prices decline.

Here's a look at Micron's stock price and revenue pattern during and following three of the last major memory cycles. The first is during the personal computing boom from 1993 through 1996.

MU data by YCharts

The next happened during the smartphone revolution, from 2016 through 2019.

MU data by YCharts

The following cycle, driven by remote work during the pandemic, spanned 2020 through 2023.

MU data by YCharts

Now, here's a look at Micron during the current cycle. The stock has come down from its highs, and some may argue that it has peaked.

MU data by YCharts

What might be next So the message is pretty clear: History shows that memory stocks have indeed been cyclical, with stock performance and revenue peaking, then going on for a period of declines. This could suggest that, after such enormous gains in revenue and share performance, we may be heading for the downward phase of the cycle. And if it isn't imminent, it could happen as the companies' manufacturing expansions result in greater supply over the next few years.

But it's important to keep in mind that the AI boom may be different from other periods we've encountered -- and that could alter the cycle in important ways. The downward phase may come much later, or it may not be as deep. And if one or both of those possibilities actually take place, revenue and stock performance might hold up much better than they did in the past. Considering the need for memory in agentic AI and in future AI phases such as robotics, this scenario could play out.

All of this means that, though history says memory companies like SK Hynix and Micron may be heading for a dip, it might not be as pronounced or long-lasting as it was in the past. And that's positive news for long-term investors, who don't mind waiting out any down periods.

If you've got $5,000 (or really, any amount) burning a hole in your pocket, then there are a handful of stocks that I think would make for great buys now. Among them are Nvidia (NVDA +3.90%), Micron (MU 1.05%), and Microsoft (MSFT +0.15%).

All three of these companies are leaders in their respective industries, and each is also on sale right now compared to historical averages -- but these prices won't last forever.

Image source: Getty Images.

Nvidia It may be hard to stomach the idea that the world's largest company by market cap is actually underpriced, but that's exactly what the numbers tell investors. Right now, it trades at 22.6 times forward earnings and 15.9 times next year's expected earnings.

NVDA PE Ratio (Forward) data by YCharts.

For reference, the S&P 500 (^GSPC +0.42%) trades for 21.7 times forward earnings, so Nvidia is only slightly more expensive than the broad market average. However, when one looks a bit further into the future, it looks dirt cheap, as 2027 is expected to be another year of strong growth for Nvidia due to the continuing ramp-up of the data center build-out. Additionally, a GPU upgrade cycle is coming later this year, as the new Rubin architecture will launch. Nvidia's Rubin chips are expected to reduce inference token costs by a factor of 10 compared to its Blackwell GPUs, and to be 4 times more efficient for training.

Those major performance increases will help Nvidia deliver a strong growth rate again next year. Wall Street analysts project 41% growth, but they have consistently underestimated Nvidia's growth since 2023. I think that's likely to be the case again this year, which could lead to an incredible 2027 stock performance, especially from its currently cheap starting point.

Micron Micron is a candidate for stock of the year, as it has risen by a jaw-dropping 250% so far this year -- even after its recent pullback. With a rise like that in the rear-view mirror, it may seem odd to continue recommending the stock, but the reality is that Micron's growth wave hasn't wrapped up yet.

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The data center build-out has created massive demand for memory chips, and there simply isn't enough production capacity to meet that demand. With such shortages come skyrocketing prices, and Micron's revenues and profits have soared as a result. This supply-and-demand imbalance isn't expected to be fully resolved anytime soon; Micron's management team believes that market conditions won't improve before 2028.

With Wall Street estimating 81% revenue growth in its fiscal 2027 (which ends in August 2027) and the stock trading at a mere 6.6 times fiscal 2027 earnings, there is plenty of room for Micron to continue rising.

Microsoft Microsoft has had the worst first half of any stock on this list. It's down around 20% so far in 2026, but based on its business performance, it didn't deserve that slide. During its most recent quarter, Microsoft's revenue rose 18% year over year, and earnings per share increased at a 23% clip. That's a solid performance for a tech behemoth like Microsoft.

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However, the market hasn't been impressed. Microsoft actually trades now for a cheap 19.9 times forward earnings. As mentioned above, the S&P 500 trades for 21.7 times forward earnings, so this discount to the broader market is a potentially perfect buying opportunity, since Microsoft's revenues are rising faster than the market's average 10% growth rate.

The market will eventually come back around to buying Microsoft at a premium. Buying shares now positions you to achieve maximum gains when that shift eventually happens.

After hitting a 52-week high of $1,255 on June 25, the Micron Technology (MU 1.05%) stock price has since retreated below $1,000. There's a likely mix of factors that have led to that decline and that are keeping the stock price from rebounding, ranging from potential profit-taking to a chip stock sell-off to increased competition from SK Hynix's listing on the Nasdaq.

In the background, however, there was a July 6 announcement from Micron that seemed to get buried.

Image source: The Motley Fool.

Micron locks in Ford On July 6, Micron Technology announced that it had entered into a long-term agreement, which it called a strategic customer agreement (SCA), with Ford to help strengthen the automaker's vehicle production. "Producing the high-volume vehicles of the future in the U.S. will require a resilient supply chain," Ford CEO Jim Farley said in the announcement.

Micron didn't offer specifics about the deal's value. But it did say the SCA was part of a collective 16 it discussed in its 2026 third-quarter earnings call.

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In that call, Micron shared that it had strategic agreements, ranging from deals with automakers to hyperscalers, spanning three to five years. From those 16 agreements, it has $22 billion in deposits and financial commitments. In total, those agreements are expected to generate over $100 billion in revenue, a figure that may be conservative.

The news alone didn't push Micron back to its 52-week high of $1,255. But working to lock in future revenue over the years ahead can help it shed its cyclical reputation, building a stronger case for Micron as a long-term investment.

Jack Delaney has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy.

Micron (MU 1.05%) has been an incredible stock to own so far in 2026. It's up around 250% this year, but it's also down around 20% from its all-time highs set just a few weeks ago. That begs the question, is now a sign of a future, bigger drop? Or is it the perfect buying opportunity for those who missed out?

Let's take a look at what Micron's stock has to offer investors after its initial major run-up and see if it's a worthwhile buy.

Image source: Getty Images.

The memory chip market will struggle to maintain balance for a while Micron fabricates memory chips, which are utilized in nearly every computing device on the market. Micron makes the two primary types of memory chips: NAND (non-volatile memory that's often used for long-term data storage) and DRAM (volatile, high-speed memory that's used in conjunction with computing units).

Both NAND and DRAM memory are utilized in all sectors of a data center. However, the massive demand wave the data center build-out is creating is too large for the memory fabrication supply chain to handle. As a result, prices are skyrocketing to adjust for booming demand and limited supply.

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Micron and its peers are scrambling to bring new production capacity online. Still, they're also being cautious not to overbuild because this demand wave is temporary (even if it lasts for a few years beyond 2026). Micron's management team believes it will have increased capacity online in mid-2027, but that market conditions won't improve until 2028 or later.

That means there is still plenty of upside ahead for Micron and its investors, but after a 250% rise, is the stock too expensive?

Absolutely not.

Because Micron operates in the cyclical memory chip business, there will always be some amount of speculation regarding the length of the demand wave. So, investors are slowly pricing in growth. Right now, the stock trades for just 13.5 times forward earnings, but also at just 6.6 times next year's earnings.

MU PE Ratio (Forward) data by YCharts

So, if the 13.5 times forward earnings is the maximum price tag that the market is willing to pay for Micron's business, and Wall Street's earnings projections for next year pan out, it's likely that the stock could double from now until this time next year. While the actual movement of the stock won't be that cut and dried, that's the reality investors are looking at.

With the memory chip market likely to experience tightness for a while and Micron expected to grow massively over that same time frame, I think investors can confidently buy the stock on the dip and achieve incredible returns.

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Artificial intelligence has changed the economics of semiconductors. Instead of competing primarily on volume, a handful of chipmakers now control components that every AI data center needs and few companies can supply. That shift has transformed pricing, margins, and profit expectations across the memory industry. 

Micron Technology (NASDAQ:MU | MU Price Prediction) sits at the center of that change. After years of boom-and-bust cycles, the company is generating profits that would have seemed impossible just a few years ago. If its fourth-quarter guidance proves accurate, Micron could earn nearly as much in a single quarter as it generated over the previous two decades — combined.

AI Has Given Micron Unprecedented Pricing Power Micron expects fourth-quarter revenue of $50 billion, plus or minus $1 billion, while forecasting GAAP operating expenses of approximately $1.86 billion. That implies operating income approaching $49 billion if revenue lands near the midpoint.

Those numbers sound almost surreal until you look at what has happened over the past year. Micron has consistently exceeded both Wall Street’s estimates and its own guidance by a wide margin as demand for AI memory has continued outpacing expectations.

Even more remarkable, Micron generated roughly $59 billion in cumulative profits over the past 20 years. One quarter could nearly match two decades of earnings. And if it crushes earnings yet again, it could equal the output of the past two decades.

The reason is simple: supply remains constrained while demand keeps climbing. Industry research firms, including SemiAnalysis, have argued that memory capacity is expanding by only about 20% to 30% annually, while AI demand is doubling. Many industry participants now expect the supply shortage to persist until 2028 at the earliest.

From commodity cycles to 83% software-level margins—the AI-driven supply crunch is triggering a $50 billion payday. © 24/7 Wall St. Margins That Look More Like Software Than Hardware Memory has historically been viewed as a commodity business where prices swing sharply with supply and demand. That isn’t today’s market.

Micron, SK hynix, and Samsung control about 90% of global DRAM production and account for virtually 100% of high-bandwidth memory (HBM) production — the specialized memory powering Nvidia‘s (NASDAQ:NVDA) AI accelerators and other advanced AI chips. That limited competition has produced pricing power rarely seen in hardware.

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According to Micron’s earnings release, its data center business generated an operating margin of 83% last quarter. Those are numbers investors normally associate with software companies — not manufacturers building physical chips.

Wall Street May Still Be Thinking Too Small Current analyst forecasts suggest Micron could produce $90 billion to $100 billion in operating income this fiscal year, while expecting roughly $133 billion in 2027. Those projections already represent a dramatic leap from anything in Micron’s history.

Granted, there is a ceiling. Rising memory prices eventually reach levels where customers either delay purchases or look for alternatives. Every pricing cycle has limits.

That said, the supply-demand imbalance still favors suppliers. If capacity continues expanding more slowly than AI infrastructure spending, pricing could remain elevated for years, even if it eases from today’s peak levels.

In other words, margins don’t have to remain at 83% forever for Micron to generate profits unlike anything investors have seen before.

Key Takeaway In short, Micron is benefiting from one of the strongest supply-demand imbalances the semiconductor industry has ever experienced. The memory chip maker could generate operating income approaching the total it accumulated over the past 20 years. That transformation stems from AI-driven demand, constrained memory supply, and an industry structure where just three companies control nearly all of the critical DRAM and HBM markets.

Regardless of whether pricing eventually moderates, today’s economics suggest Micron has entered a different phase of its business. For investors, the key question is no longer whether AI is boosting memory demand. It is how long this shortage — and Micron’s newfound pricing power — can last. If supply remains tight through 2028 as many industry observers expect, Wall Street’s current forecasts may prove to be only the starting point.

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