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Memory and storage names are rallying Thursday afternoon on blowout earnings across the sector. Sandisk (NASDAQ:SNDK | SNDK Price Prediction) shares are up 16% to $1,565, Micron Technology (NASDAQ:MU) stock is up 7% to $971, Western Digital (NASDAQ:WDC) shares are climbing 8% to $492, and SK Hynix (NASDAQ:SKHY) shares are up 8% to $167.

Dedicated memory ETFs are riding the wave. Roundhill Memory ETF (CBOE:DRAM) shares are up 6% to $58, and Tema Memory ETF (NYSEARCA:DISK) shares are advancing 7% to $39. The leveraged Defiance Daily Target 2X Long DRAM ETF (CBOE:DRAL) is jumping 11% to $11.40, while the Roundhill T-REX 2X Long DRAM Daily Target ETF (CBOE:DRAL) is also up 11% to $13.50. Meanwhile, broad semiconductor funds lag the specialists; for example, the iShares Semiconductor ETF (NASDAQ:SOXX) is up 3% to $561.

Earnings Blowouts Drive the Rally
Sandisk reported Q4 FY2026 non-GAAP EPS of $39.25 vs. $33.28 consensus on revenue of $8.96 billion, up 371.6% year over year (YoY). Datacenter revenue jumped 437% YoY for the full fiscal year, and CEO David Goeckeler stated Sandisk “closed fiscal 2026 with a leading technology portfolio, established datacenter as a key growth pillar.”

Micron’s Q3 FY2026 revenue hit $41.46 billion, beating consensus by 17.6%, with non-GAAP EPS of $25.11. CEO Sanjay Mehrotra pointed to “the strategic value of memory in the AI era” and multi-year Strategic Customer Agreements backing HBM4 volume shipments.

Western Digital delivered Q4 FY2026 adjusted EPS of $3.56 on revenue of $3.75 billion, up 43.8% YoY. Also encouragingly, Seagate Technology (NASDAQ:STX) posted Q4 FY2026 non-GAAP EPS of $5.71 on revenue of $3.63 billion, up 48.5% YoY, while SK Hynix’s Q2 FY2026 revenue climbed 256.8% YoY with operating profit up 557.2%.

Same Theme, Opposite Bets
The two dedicated ETFs hold nearly inverted portfolios, so today’s return depends heavily on which fund you own. Per the Roundhill fund’s May 11 fact sheet, its DRAM-heavy roster runs Samsung Electronics at 25%, SK Hynix at 24.2%, Micron at 23.8%, Kioxia at 4.9%, Sandisk at 4.7%, Western Digital at 4.6%, and Seagate at 4.5%. This fund carries a 0.65% expense ratio, and it’s heavily tilted toward the top three holdings and to Asia.

The Tema Memory ETF, launched June 30 and actively managed, tilts toward NAND and storage. Its Aug. 12 weights: Kioxia 15.3%, Sandisk 15.2%, SK Hynix 12.6%, ChangXin Memory Technologies via swap 8.5%, Nanya Technology 5.4%, Samsung 5.4%, Seagate 5.1%, Micron 5%, SK Square 4.7%, and Aehr Test Systems (NASDAQ:AEHR) at 4.5%. This fund has an expense ratio of 0.75%, roughly $76.3 million in assets, and is run by Yuri Khodjamirian and Hong Yi Chen in partnership with SemiAnalysis.

Micron sits at 23.8% of the Roundhill fund’s holdings but only 5% of the Tema fund, while Sandisk flips it, at 4.7% of Roundhill and 15.2% of the Tema Memory ETF. That’s why Sandisk stock’s 16% pop punches harder inside the DISK ETF, while Micron carries the DRAM ETF. The Tema Memory ETF closed at a 2.6% premium to net asset value as of August 12 with a 30-day median bid/ask spread of 0.6%, so buyers paid above the underlying value into today’s rally.

Where Memory Hides in Broad Funds
“Semiconductor exposure” and “memory exposure” aren’t the same. In the VanEck Semiconductor ETF (NASDAQ:SMH), Micron is the third-largest holding at 9.4% per the May 27 fact sheet, with a 0.35% expense ratio. The SPDR S&P Semiconductor ETF (NYSEARCA:XSD), equal-weighted with a 0.35% expense ratio, held no memory name in its top ten as of April 15; the iShares Semiconductor ETF carries a 0.33% expense ratio as of July 31.

The Leveraged Trade Cuts Both Ways
Two 2x funds launched the same day, June 24, both tracking the Roundhill Memory ETF. The Roundhill T-REX 2X Long DRAM Daily Target ETF trades on Cboe BZX, rebalances daily, and uses total return swaps to target 200% of DRAM’s daily move; its gross expense ratio is 1.5% and net is 1.25% under a waiver running to Sept. 30, 2027. The Defiance fund (DRAL) carries a 1.3% expense ratio and roughly $18.76 million in net assets, with five total return swaps on DRAM at 41.3%, 40.4%, 39.9%, 39.8% and 38.6%.

The Defiance Daily Target 2X Long DRAM ETF reported a one-month total return of -59.6% on NAV and -59.7% on market price as of July 31, and since-inception returns of -55.7% and -55.8% from its June 24 launch. These are short-term trading vehicles for sophisticated traders who monitor positions daily, not buy-and-hold investments.

What to Watch
Investors can watch for whether the gap between the DRAM-weighted and NAND-weighted funds widens as this rally extends and whether the Tema Memory ETF’s premium to net asset value persists. They can also watch for whether holders of the 2x products understand the daily compounding math before carrying them past a single session.

The next anticipated catalysts are Micron’s fiscal Q4 2026 report and the HBM4E ramp into calendar 2027. Memory is the loudest trade on the tape, and the fund an investor picks matters as much as the theme itself.

Contact [email protected] for any questions or corrections.

Micron (MU +5.41%) is riding the AI memory boom, but its next growth engine could emerge from autonomous vehicles and humanoid robots. These expanding markets may give the chipmaker a more durable future than its deeply cyclical reputation suggests.

Stock prices used were the market prices of July 29, 2026. The video was published on Aug. 11, 2026.

Rick Orford 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. Rick Orford is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link, they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.

Ballast Inc. lowered its stake in Micron Technology, Inc. (NASDAQ: MU) by 22.9% in the second quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission. The fund owned 7,591 shares of the semiconductor manufacturer's stock after selling 2,259 shares during the quarter. Micron Technology makes up approximately

Micron Technology, Inc. (NASDAQ:MU) stock traded lower Thursday morning, even as U.S. stock futures pointed slightly higher. Nasdaq futures rose 0.07%, while S&P 500 futures gained 0.18%.

AI Storage Demand Boosts NAND MarketMicron’s premarket decline comes despite a favorable industry backdrop. The company is benefiting from a shift toward higher-value NAND products as artificial intelligence fuels demand for enterprise storage, according to Counterpoint Research.

Enterprise solid-state drives accounted for 48% of global NAND shipments in the second quarter, nearly double their 26% share a year earlier. Counterpoint said rising AI inference demand tightened supply and helped push industry revenue to record levels.

Micron Holds 13% Of NAND ShipmentsMicron held about 13% of NAND shipments. It trailed Samsung Electronics Co., Ltd. (OTC:SSNLF), SK hynix Inc. (NASDAQ:SKHY), privately held Yangtze Memory Technologies Co., or YMTC, and Kioxia Holdings Corporation.

However, Micron remained ahead of YMTC by revenue despite the Chinese rival capturing a larger 14% shipment share. Sandisk Corporation (NASDAQ:SNDK) held an 11% shipment share.

Premium NAND Mix Could Drive ProfitabilityCounterpoint said NAND profitability through 2027 will increasingly depend on selling the right mix of higher-value products rather than simply shipping more bits. That trend could favor suppliers with greater exposure to premium enterprise storage as AI infrastructure expands.

Against that backdrop, Micron’s Thursday decline puts more focus on technical levels following the stock’s recent consolidation.

Micron Technical AnalysisMicron traded 3.4% above its 20-day simple moving average of $879.08. However, it remained 5.8% below its 50-day SMA of $965.16.

The longer-term trend remains stronger. Micron traded 18.5% above its 100-day SMA of $767.27 and 66.8% above its 200-day SMA of $545.19.

The relative strength index stood at 50.23. An RSI near 50 signals neutral momentum, meaning neither buyers nor sellers have a clear advantage.

Micron’s 20-day SMA remains below its 50-day SMA, a bearish short-term signal. However, its 50-day SMA remains above the 200-day SMA, supporting the longer-term bullish trend.

Key resistance: $1,012. Key support: $891.50, near the 20-day exponential moving average of $891.82. Micron Earnings And Analyst OutlookMicron’s next earnings report is estimated for Sept. 22.

Wall Street expects earnings of $31.27 per share, up from $3.03 a year earlier. Revenue is projected at $50.81 billion, compared with $11.31 billion a year ago.

Micron carries a Buy consensus rating and an average price forecast of $1,537.50. Recent analyst actions include:

Citigroup: Buy, lowered price forecast to $1,150 on Aug. 7. KeyBanc: Overweight, raised price forecast to $1,750 on July 14. Cantor Fitzgerald: Overweight, raised price forecast to $2,000 on June 29. Benzinga Edge RankingsMicron scores strongly across several Benzinga Edge measures. Its Momentum score stands at 99.59, Quality at 97.41 and Growth at 91.47. Its Value score is lower at 34.24.

The rankings point to strong momentum, quality and growth, while valuation remains the weaker part of the profile.

MU Price ActionMU Stock Price Activity: Micron Technology shares were down 0.72% at $904.75 during premarket trading on Thursday, according to Benzinga Pro data.

Image via Shutterstock

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Download this episode on Apple Podcasts, Spotify or listen below:

Sara Awad from Tech Contrarians talks tech's tough year (0:40) Great results being viewed as not good enough (3:20) Semiconductors have more downside, but potential remains (6:50) Memory dynamics (8:40) Thinking about 2027 (14:50) ASIC shift favors ARM (19:45) Are we in a bubble? (23:30)

Transcript

Rena Sherbill: Very happy to welcome back Sara Awad from Tech Contrarians, and a new podcast she's gonna tell you about at some point too. Sara, welcome back to the show. Really great to have you as always.

Sara Awad: Yes. It's always great to be here. It's a pleasure to speak with you, Rena. Thanks for having us on again.

Rena Sherbill: It's always great to talk and always great to talk tech, especially well, I mean, I think I say that every time, especially these days, but as questions continue to unfold about the strength of the AI trade and various players, what would you say to investors right now?

Sara Awad: I think what investors are I think dealing with this year is a bit of a tough situation, right? Because it's really been an interesting year. We had Q1 was a bit of a lull and then Q2 was a huge rally with the stocks going up eighty seven percent, a little over eighty-seven percent.

And then Q3 starts, second half of the year begins, and then we have this downturn, right? It's a lot of profit taking, a lot of fear. We switch from this greed sentiment to a fear sentiment and then we're seeing the market kind of struggle back and forth with it now.

And I think last time when we spoke, that was around maybe mid-May. That was essentially mid the entire rally that happened in Q2. And what we were discussing is that in the rally everyone looks like a winner. But not everyone's gonna come out of a correction as a winner.

And I think that's really what's becoming more pronounced in Q3. So the names that we saw as high flyers in Q two are actually some of the underperformers in Q three and vice versa.

So if we take that and you know, we think about the switch between first half and second half, you really see that kind of dynamic materialize.

And alongside it, this theme in which earnings are acting more as a test rather than a catalyst, specifically after that Q two run, everything is kind of coming out as not good enough.

I think that's a theme to be really cautious of and sensitive to. I mean, we saw (TSM) report great results, we saw (ASML) report great results and you know even raise their outlook. we saw Samsung (SSNLF) report a nineteen-fold increase in profit, and all three still traded down. I think what we're seeing is a hypersensitive market in which everyone is waiting for the other shoe to drop and I think we let out some steam since the beginning of of Q3, specifically on the semi-front.

But it seems that the market is still in limbo and also dealing with new red flags from the circular financing to the Chinese competition. So they're just dealing with new realities.

A lot of these red flags existed in Q two, but I think they're getting a lot more attention in Q three.

Rena Sherbill: Does it make sense to start with the red flags, or does it make sense to ask the question about the companies that do seem to be doing, in your words, good enough? Is it truly good enough? Like will it turn back around? How would you describe it in context given that the reaction in the investor community reaction hasn't necessarily been reflective of what's going on with the stock?

Or would you put stocks in the even better category that have been reflected in investor sentiment being positive?

Sara Awad: I think, and let me know if I understood the question right and I'm answering it from from the right angle, but I think a big part of what we're seeing is this this theme of great results being viewed as not good enough is because in Q2, the market preemptively priced in a lot of the positives to come and didn't really pay attention to the fact that at the end of the day, what we're talking about is a semi-rally. And at the end of the day, we're talking about components and a supply chain in which there's a shortage. and even if

From our perspective, we believe that this shortage is a supply chain-driven shortage rather than an end-demand-driven shortage because we know that you know PC TAM and smartphone TAM are expected to contract by double digits this year. So end demand is pretty weak. even though we think this is a supply chain-led shortage, the idea that so much of the positive news got preemptively priced in in Q2 made it so that by the time we got

To earnings in Q3, there was a combination of the results didn't look good enough against what was priced in. Investors were looking for more. And simultaneously, you know, when we entered Q2, expectations were pretty low. And we were entering Q3, it's a different kind of expectation game. So that really does shift a difference. And then turning back to the supply chain factor in all of this, at the end of the day, there are physical constraints to achieving more financial upside. Right? You have components, and we see this really clearly with the optical guys.

There's a ton of demand, but there's not enough supply. There's a lot of bottlenecks within the semi-industry at the moment. So there's physical constraints that really prevent further upside that has already been priced into the stock. And I think that's part of what we're seeing get reset right now. and so it even when we look further out, I don't think that we're gonna see necessarily the this you know AI bubble pop conversation happen in the second half. we're thinking about that more for, you know, twenty twenty seven, first half of twenty twenty seven around then.

But what we're seeing in the second half is the semi-correction. And a lot of it is because the supply chain inflated a lot of the the pricing. A lot of the pricing went up because of this idea that there's a shortage. So there's a lot more leverage for these guys in the semi-supply chain to raise prices. That made their financials look extremely good in Q2 against what is a weak end demand environment. And then by the time that Q three comes around, you don't, you know, you have more pricing leverage, but then that begins to wane as end demand becomes more pronounced as a negative.

So that's kind of how we're thinking about it in terms of how investors should view these earnings. a big part of what we're seeing get reset are the expectations that preemptively got built up in Q2 and now are being digested against reality. and at the same time, and I I would say that's healthy, right? Because everyone knew in Q2 that this can't last. And that's why we saw such a mechanical shift, I would say, between Q2 and then Q3. But then looking into the second half, I don't think that this is the end of it, right? The the socks.

Being down, I think it was as of this Monday at roughly 13%. I don't think this is the end of this semi-correction. Instead, the way we're looking at it is in the second half of the year, we're gonna see, you know, we're gonna see semi-semis correct bay as the the price increases in the supply chain also rebalance against the reality of end demand. So we saw a lot of double ordering, in our opinion. We're seeing a lot of customer pull-ins out of

fear that this there's shortage and and you know, you can't get components and you need to get components for the outlook that you've guided and for the expectations that Wall Street is kind of holding now against the semiconductor industry. Does that do I hope that helps answer that question?

Rena Sherbill: I think as we continue to have the question and answer unfold, would you does that mean that semis are a hold right now? How are you looking at the semis? And are you looking at them as a group? Are you looking at any individual stocks separate from that group, if so?

Sara Awad: I would say that in general I think there's an overarching kind of blanket on the semis in which we are gonna see this, we're gonna see the (SOXX). I think it has more downside to come. That doesn't make us, you know, ignore the semis entirely.

Instead, I think there's a lot of potential still on the table in the semiconductor industry. But the idea is that you wanna think about the guys who s who have more balanced expectations around them.

And so for example, and and you wanna think about the guys with more balanced expectations and equally as important, you wanna stay away from the the companies that have, you know.

Where the where the narrative has run ahead of where reality can can really achieve that upside. And that when I say that, I think mainly of memory, right?

I think part of what we're seeing is that the AI narrative this year is going to is has in large been built on that dynamic of the supply chain-led shortages. and that really did prop up a lot of specific players as the winners. I think as we see these price increases moderate in the second half, or there's less leverage for price increases as inventory builds up.

We're gonna see a lot of expectations or the financial performance around these players that got propped up by these price increases come down. And that's where, you know, memory is is center focused for us because I think when we last spoke, memory was it was we were mid-May, memory was gaining a lot of traction.

Micron during Q2 entered the one trillion dollar club. And a lot has happened since, in the sense that a lot has happened to unpack the this bull narrative around memory in which memory is regarded as no longer cyclical.

So we saw the three big DRAM guys report since the last time we spoke, we had SK hynix (SKHY) come to the US market.

And I want to highlight in specific Micron's results, I think they underpin this kind of dynamic. So if there's a company that I would stay clear of in the second half, I think it would be the memory kind of sector because I think those guys are at the highest risk because memory is the component that increase the most in terms of of price.

And I thinkm was most misunderstood by the market in terms of what was driving this mem memory rally. and I think we touched upon this briefly in May, but I'd love to get into it a bit more.

Rena Sherbill: Yeah, please do. Please do.

Sara Awad: Essentially so a couple of things to get to here, right? So the bull argument is that memory is no longer cyclical, but all the data points since you know since Q2 until today actually point to the exact opposite, right?

I think there's three main ones to point out here.

The first is SK hynix coming out in, I think it was late June, on what's being what's you know looked at or called Black Tuesday and saying that, hey, we're gonna reallocate capacity, manufacturing capacity from HBM to general purpose DRAM.

And SK hynix has the largest share in the HBM market, around something like 58%. And so them saying that we're gonna shift from HBM, which is you know the hot AI memory, to general purpose DRAM is essentially highlighting this idea that general purpose DRAM is where the money is.

And we already know this from Micron's own CEO when he noted that on the earnings call that I think this was in December, that non-HBM gross margins, not in December, sorry, I think it was it was in Q2, non-HBM gross margins are actually higher than HBM gross margins. So SK hynix making that shift as the largest shareholder in HBM does underpin this idea that they're following the money, right?

And so I think that helps break down that that misunderstanding the market had on the memory trade. And then the other part of that equation is that SK hynix adding more supply, more DRAM supply into the market actually has the impact of reducing the ASP leverage that's happening right now on the DRAM front.

So to take it back a minute, the reason why we think memory kind of popped and Micron had these great run and great outperformance, huge margin expansion, we don't think that happened because of HBM.

We think that happened because of the non-AI side of the memory, because of general, you know, general purpose DRAM spot prices going up insanely high.

And we think that's what underpinned the gross margin expansion from Micron, in which they guided to I think it's 86 for next quarter, and they printed 84.6 for this quarter. So they're really benefiting from the higher ASP on the DRAM side.

So just going back to the quarter they reported at the end of June, their DRAM sales grew 67% sequentially. And that was driven mainly by a 62% in ASP and bit shipments, on the other hand, we're only up 2%. So it's really highlighting the results are telling us that the growth is coming from pricing.

And if we believe that memory is cyclical, and it's you know historically proven to be cyclical, if we believe that memory is cyclical, then at the end of the day, when you have a shortage, you're gonna have higher, higher pricing, high ASP.

But then when supply begins to catch up to demand, what you're gonna have is that you're gonna lose that ASP leverage. And so as SK Hynix shifts supply from HBM to DRAM, that's gonna create a lot more output on the market.

And where it becomes a bit more technical is this idea that HBM has tripled the diet size of DRAM.

So when you shift capacity from HBM to DRAM, you actually have your output increase at a much faster pace. So we're talking about a lot more supply in the market.

And so more supply in the market means you lose this ASP leverage. And that means that we're looking at microns, gross margin trajectory that's been something like a dream, right? 86%. That's the highest gross margin there is in the semiconductor industry.

That's even higher than NVIDIA (NVDA) at its peak, which is crazy. We're looking at that that gross margin expansion, moderating, or even U-turning back to more, I would say, realistic levels.

And so that's just one factor of how we're looking at memory and the risk there, thinking about what names we'd be cautious of in second half.

The other factor is the Chinese DRAM supply also entering the market with CXMT IPOing in China and then also talking about adding 85,000 wafer starts per month of DRAM. That's compared to SK Hynix adding 60,000 a month and MU adding 30,000 a month, and Samsung (SSNLF) adding 50,000 a month.

And I specify these three because they're the largest DRAM players. So the idea is that CXMT is actually gonna be looking at an output of 350,000 wafer starts per month by the end of the year. And that puts it within, I think, roughly a 25,000 range of microns own output.

So if we're seeing more supply from SK Hynix, we're seeing more supply from China DRAM, and we're seeing guys like Apple (AAPL) shop for Chinese memory and lobby at the Pentagon to be able to use Chinese memory, Chinese DRAM.

I think this sets up the kind of conversation in which we're looking at more supply. The shortage will ease, ASP leverage will come down.

And then to add just a cherry on top here, Trend Force is expecting now DRM contract pricing to moderate to 13 to 18% growth in Q3 this quarter, as opposed to what we saw in Q2, which was 53 to 63% growth.

So I think that the conversation on memory, and we were early definitely on Micron on the downgrade, but I think that we're seeing our thesis play out now. I think the conversation on memory is beginning to become more pronounced.

I mean Q2, no one was talking about the red flags in memory. And in Q3 we're seeing a lot more conversation about that. So I think it reaffirms what we discussed back in May.

It also I think speaks to looking at the second half as the supply comes online, a more risky dynamic around memory.

Rena Sherbill: Could you share more of how you see the coming months and the coming year playing out vis a vis the different lanes in tech?

Sara Awad: Yeah. So I think when we we're thinking about the second half and then we're thinking about twenty twenty-seven, I think a big part of what we're seeing is the AI, AI is maturing and it's segmentizing.

And this is a theme that we've been watching for a while and I think we discussed on this podcast before. And as AI matures and segmentize, what we're seeing is that we're shifting from this conversation of token maxing to token efficiency.

This is underpinned by this idea that earlier this year and even last year, everyone was pushing for enterprises, for individuals to use AI as much as possible, right?

Even Uber (UBER) was pushing employees to use AI as much as possible, and then they blew through their budget in the first four months of the year.

So what we're seeing is that compute is not free, but AI is free. A lot more of the end users and enterprises are beginning to become more cost conscious.

We're entering a more cost conscious, I would say, phase of of the AI boom or the AI cycle.

As we enter this more cost conscious phase, I think the conversation is a lot more about what kind of solutions you're using for compute. So we have AI GPUs, NVIDIA still dominates the scene and Vera Rubin is coming up and the demand from all of our data points looks really great on that front.

Very strong demand. Case in point, Google (GOOG) (GOOGL) and Tesla (TSLA) haven't spent the majority of their full CapEx. And I think that's part of what we're gonna see go fully to Vera Rubin and into NVIDIA's pocket with the ramp of Vera Rubin and into the second half and then early '27.

But what we're seeing is that because of the the AI conversation is much more cost conscious, we're seeing more hyperscalers gravitate to lower cost compute solutions.

And that's where ASIC comes in. So I think as we think about you know second half of this year, I think Vera Rubin is really gonna dominate the scene, but then in 2027, I think ASIC is going to become a much bigger part of the inference market because you need to focus on how can you get the lowest cost solution to power what you're doing?

And this becomes even more, I would say, important with the dynamics that we've seen kind of play out over the past two months from Chinese competition entering the scene.

So it's kind of like we had a a Deepseek moment revival when Moonshot's Kimi K3 came out last month, because you know, we're seeing China really compete with US frontier models on performance, but massively undercut them on price at a time when the market as a whole is very conscious about all this AI capex spend and whether or not we're gonna see this AI return on investment and how these hyperscalers can show that.

So it became a very, I would say, tangled web in which the US frontier models, for the hyperscalers to remain meaningfully competing and being able to show a return on their investment, they need to make sure that their their compute is at the lowest cost possible.

And so that's what ASIC I think is gonna really provide. And we're I think, again, at the top of the ASIC race is Google with their TPUs. Not only that they use for their internal use and then they rent out to others, but also that they're now as of this quarter selling full TPU rack systems.

So I think Google has executed the best on that front and now we're seeing Amazon be a close second. And then Meta and Microsoft are really trying to to catch up.

OpenAI (OPENAI) is working with Broadcom (AVGO) on their own ASIC chip. Anthropic (ANTHRO) has plans to to work on its own ASIC chip. So we're seeing this kind of shift in terms of a shift to lower cost solutions as the the idea that you need to get the lowest cost solution for compute available.

I think that's a big part of where the conversation headed. So looking into 2027, that makes us a lot more, I would say, cautious on NVIDIA, because I think NVIDIA has the most to to lose from the switch to this shift towards more ASIC adoption.

Because now for the first time ever, NVIDIA's gonna have to be forced to share a part of the AI accelerator market with ASICs, right? From a eighty to ninety percent, those are the current estimates, eighty to ninety percent market share is is gonna be pressured.

And so I think that's what keeps us more on the sidelines of NVIDIA, thinking about it into next year. Because at the end of the day, I think the AI Capex is gonna have to be spent across all of these players.

I just wanna emphasize that's where we like guys like Marvell, right? 'Cause when these hyperscalers are going for ASICs, they're multi-sourcing. No one wants to have all their eggs in one basket.

Similarly to how they were forced to have all their eggs in one basket at the beginning of the AI boom with NVIDIA. So everyone is trying to multi-source. Google went with Broadcom, then Media Tech and then Marvell (MRVL).

And now we have new ASIC players entering the scene like Qualcomm (QCOM).

So I think that's where the 2027 conversation is leading towards. So that's where I would pay attention for investors kind of trying to gauge how to think about the semis for for next year.

Rena Sherbill: Much appreciated. Any other stocks or notes to mention?

Sara Awad: Yeah, I would say part of that ASIC conversation I think really favors part of that ASIC shift really does favor ARM (ARMH) because ARM-based CPUs are actually, I think they're the best fit for the ASIC conversation because they have the lower power consumption, which is increasingly important in the AI infrastructure build out.

And I think ARM CPU are already embedded into a lot of the the tier one players via, you know, ARM's designs.

So I think that we're gonna ARM be the favorite choice on that front. It's not to say that the X86 market where Intel (INTC) and (AMD) have their playground, it's not to say that these guys aren't gonna benefit, but I think ARM is gonna be the winner from that theme.

Both the ASIC theme and then this agentic AI theme. Because at the end of the day, ARM is was the first to show us what an agentic AI rack would actually look like.

Everyone else liked to talk, and there's definitely benefit to go around, but I would say I think ARM is is the favorite choice there and the others still need to prove themselves. the other stock I think it'd be kind of worth addressing is Intel, because it also had this huge pop-out moment in Q2.

And for Intel, they had this huge you know pop-out moment. We had a lot of rumors about them getting external customers for their for their foundry business. Interestingly enough rumors that management never confirmed but that Trump did. So we we didn't really get a lot of clarity on those.

But I would say for Intel, we're we're more cautious as well. we the reason why we're more cautious is because of this last earnings call. Basically, on the last earnings call, management talked about, not on the last earnings call, excuse me, on (ASML)'s earnings call, actually.

ASML announced that Intel is using their high NA tools, their high in A lithography tools for its 18A node. and that's that to us was a big flag, a big red flag. And the reason why is because it's a big red flag for the foundry business.

And the reason why is because Intel was meant to use the high NA tool, which comes at a very high price, close to 400 million. It and almost you know double what a UV tool would cost. So Intel was supposed to use that more expensive tool on its 14A node rather than its 18A node.

The fact that they used it on their 18A node tells us that the yields on their 18A node weren't the greatest, and so they needed to use this farly more expensive machine to be able to up the yields there. and so that makes us feel like there's a lot more uncertainty about whether Intel is gonna get a meaningful external customer because any customer coming on will have to, you know, will be harming their own business if if they go to a foundry with bad yields or at least with yields that don't compete with those of TSMC.

So that's how we're also thinking about the Intel foundry side of the business because we've been watching Intel for a sign of, you know, external customers coming on and our indicator for that was if Lip-Bu Tan decided to raise CapEx, and we still didn't get that even as of you know this quarter. We got a very mild increase in CapEx.

I think that this underpins this idea that the Intel Foundry business it moves more on moves the stock more on headlines rather than the fundamentals. so you know we know that as of this call, you know, they're raising their their fiscal capex to 20 billion up from 18, which which up from 18 last year, which isn't that much more meaningful.

And they said that in twenty twenty seven they're gonna raise it substantially, but we didn't get any numbers. So I think this is also management kind of having a foot in the door and then a foot outside of the door because there's some uncertainty on that front. So that makes us a bit more cautious as well on Intel in the second half after that run up that we saw in Q2.

Rena Sherbill: It strikes me that, as we close out the this conversation, and again, anything else that you feel like is worthy of investors' attention right now, happy for you to share that.

But it strikes me that there's often talk of this bubble in tech. I believe you did mention some bubble language at the beginning in terms of something coming to burst, but A, do you see the conversation as a useful conversation? B, do you see it as a large bubble? Do you see it as a series of smaller bubbles in different lanes in the tech sector and also at different points in the cycle, like this is a bit of a bubble and then this becomes a bit of a bubble and then they kind of even things out and return to center. How would you respond to that? Or how do you think about that?

Sara Awad: That's a great question. I think that's a question more people should be asking.

I think when it comes to the bubble conversation, there's definitely a bubble and it's growing. I think that's without a doubt the case.

The way that we're looking at it is basically, yeah, there's gonna be a semi-correction second half, but then the more pronounced real bubble conversation, I think more it's more related to AI capex, right?

And we had the bubble fears get revived when there was a really clear dynamic in which semis were being rewarded while the hyperscalers that are funding the semi-rallies were being punished for that spend.

And so then when you have China enter the conversation as well with cheaper alternatives and other models, making it so that essentially, as of now, 45 China wins 45% of US company AI use.

That puts a lot of pressure, I think, on the AI CapEx spend and the pressure from investors on these tier one players to show return on investment. So I think that's at, you know, that's that's at the core of when the bubble pop is gonna really materialize.

And I think it comes more from a financing perspective. That's I think what's gonna really push us off the edge. and that's you know, that's when we think about the things that we've seen NVIDIA and and the broader market do and the creative ways, really the ri very creative ways that the market is beginning to try to finance this AI boom.

So we had NVIDIA and talks to provide, I think it was about 250 billion financial backstop for open AI, which is unprofitable private company with the IPO likely pushed out until next year, and rumors of missing internal targets. And we know getting pressured in terms of market share by competition from Anthropic, competition from the other Chinese models.

And then you have a conversations or negotiations for financing up to $350 billion to fill up those data centers with chips.

That NVIDIA claims is not circular financing because there's no written commitment in which OpenAI has to buy NVIDIA GPUs, but I think it's it's kind of implied. and then NVIDIA stakes a bunch of the neo-cloud players, including Nebius, Core Weave, and then Iron this year.

So it looks like NVIDIA is increasingly funding its own customers. and so if we think about the circular financing structure that this creates, it creates essentially what I would say a scenario in which money moves in a loop, right? You invest it and then it gets bought out from your chips and then you invest it again and then rinse and repeat.

I think that's where that's that's a conversation to pay attention to for the bubble pup because that underpins this idea of how much more money can we put into the AI infrastructure build-out. and and indeed the idea is that how much more money can we put into the AI infrastructure build out without seeing a material return on this investment, right?

Specifically that we're seeing people like companies like Google and Amazon (AMZN) go free cash flow negative and we're seeing guys like Meta (META) really struggle internally with their with their AI kind of narrative or their AI persona and how they want to pursue that.

So this idea I think is is what we're seeing. And then Meta coming out also last quarter and talking about this potential in which they may be leasing access capacity is a positive for Meta. And it's one that we forecasted in our investing group prior to the jump on that headline, but it's one that's actually pretty much a negative for the AI CapEx story because it opens this conversation or it asks, proposes this question of did Meta overspend so that they do have this access capacity?

We didn't get confirmation from Zuckerberg that that's the case, but the fact that this is now something that Zuckerberg is mentioning, even the mention of the word access capacity is a spook to this AI Capex story because it means are you did you guys overspend?

Did you miscalculate something in this? So that's I think that's what we're paying attention to on the bubble front. I think that's where it's really gonna come from.

And then this week we had very interesting news with NVIDIA essentially partnering up with Wall Street's six biggest lenders to establish what's being called the compute financing platform, where they're creating pools of capital at attractive rates for NVIDIA's customers.

And you know, this is being framed by Jensen that chips are now an investable asset class. that entire dynamic, I think, it also speaks to this I w it speaks at very worrying environment forming because these firms are looking to deploy $500 billion when more expected to come.

And this is clearly trying to solve a problem that is the reality that spending commitments on AI infrastructure are hitting peak levels and compute is getting increasingly more expensive.

So the market is really getting creative about how to finance that. But then how sustainable is this considering that we don't have the cleanest proof points about return on investment from these hyperscalers yet?

So this isn't a one-off situation. I think we're seeing an accumulation of this, and that's why I would say, yeah, there is a bubble and it is inflating. and one data point doesn't make a trend, but we're not talking about one data point.

We think the bubble pop is gonna be driven by how we're beginning to fund the AI infrastructure build out, you know, from the free cash flow to credit. and and that's where we enter a riskier territory. and I think that's where investors should also, that's what they should focus on to think about the timing of the AI bubble CapEx.

I think that it's also worth joining this conversation with China. Because I know a lot of people compare this AI bubble to the dot-com bubble, but something we like to throw into the mix is that we didn't have China be such a prominent part of the last bubble, right?

It really is a much bigger part of today's bubble. When we look at how this is impacting the cost of AI or the spend on tokens, essentially the cost for businesses to run AI models has fallen, as of article published this week, report published this week by Jeffries, it's fallen to a yearly low with the surge in adoption for Chinese models, right?

And model routing and a lot of what we're seeing on that front side. So average inference in prices are now ranging between a dollar sixteen to a dollar eighteen in August.

And that's down from two dollars and four cents to one dollar and forty-five cents between May, end of May, and then mid-July. So the price decline really does emphasize this idea that we're we're in a a phase of AI that's much more cost conscious, and that's why we're seeing this have a ripple effect through the entire semiconductor sector and I think through the broader AI theme.

And I think that's really important to to pay attention to because the LLM token expenditure expenditure index is actually coming down.

So people are spending less to use AI, but compute is still, we're still seeing over 740 billion spent on AI CapEx. So there's this mismatch that needs to reconcile.

Rena Sherbill: Appreciate it as always. For those wondering, you can find out more from Tech Contrarians on Seeking Alpha. You can find out much more about the tech sector on Tech Contrarians on Seeking Alpha. Anything else to add to to this conversation?

Sara Awad: The one last thing I'd love to jump in and and add is that I'd love to tell everyone that we've launched a podcast called the Tech Talk on our Tech Contrarians page and we do two kinds of episodes there.

One in which we bring on an industry-driven perspective on specific parts of tech or the periphery of tech. So we started off actually with an episode on SpaceX (SPCX), bringing on Jeff Foust and Jason Rainbow, two experts on the space industry. They've been covering it for each well over a decade.

And the second kind of episodes we're launching there are we're calling them bulls versus bears. And that's where we're hoping to bring on two Seeking Alpha analysts with opposing views on the same stock, to to really talk through it and give the investor community kind of both aspects of a bull case and a bear case confronted against one another.

Rena Sherbill: Nice. You know, we did that on this podcast a couple times. We did it on Tesla and another one, I think maybe Exxon. I love the idea and that sounds really exciting.

Sara Awad: Really? That's awesome. I mean Rena, you're our inspiration, if I'm being completely honest. So yeah, you make it look so easy. So we're hoping to provide some value similar to the value that you've added to so much of the Seeking Alpha investing community.

Rena Sherbill: Stop stop, thank you. I appreciate it. Again, where can people find the podcast? Your podcast?

Sara Awad: Yeah, so it'll be on the Tech Contrarians page. Feel free to check it out and feel free to visit our Investing Group and hop on a one on one call with us. That's the community's favorite feature, I like to say. And so feel free to join the group and jump on a call.

Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.

Investors in Micron Technology (MU +4.92%) are used to big swings in the stock price. The shares climbed more than 800% from the end of the first half of 2025 to the end of June 2026. Since then, however, shares have dropped more than 25%, as of this writing.

The roller-coaster ride might not be over. Wall Street analysts predict another big move in Micron's stock price by next summer, based on their price targets. Here's what investors can expect.

Image source: The Motley Fool.

How much will Micron stock be worth by mid-2027? There are 56 analysts covering Micron stock. None of them have a sell rating, and just four have rated it a hold. The rest are all bullish on the stock. As a result, the median price target for the stock on Wall Street is $1,600 per share. That represents an 86% increase in value from the price, as of this writing.

The biggest driver of Micron's profits over the last year or so has been the memory chip supply shortage. Analysts see no sign of that shortage easing anytime soon. Even as Micron and its competitors build new capacity as quickly as they can, the first of their new facilities won't start producing meaningful supply until next year. More will come in 2028 and 2029, but in the meantime, prices for DRAM and NAND chips will continue to rise.

Keybanc analyst John Vinh expects Micron's DRAM prices to climb between 15% and 20% sequentially in the third calendar quarter and another 15% in the fourth quarter. NAND prices could climb even faster, up 30% to 40% this quarter and another 15% in the fourth quarter. He expects high bandwidth memory chips, the kind packaged with GPUs and AI accelerators, to double in price next year. He has a $1,750 price target on the stock.

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Analysts are also encouraged by management's ability to strike long-term agreements with customers to lock in pricing years in advance. Micron said it signed strategic customer agreements that will represent about 40% of its revenue once fully executed. For those with pricing bands, the floor is above its peak quarterly margin from past earnings cycles, management said.

Cantor Fitzgerald analyst CJ Muse says such agreements point to a more durable and extended earnings cycle. He has a price target of $2,000 on the stock.

Investors shouldn't take sell-side analysts' price targets as gospel, though. They tend to be an optimistic bunch. Moreover, the spread between the lowest price target on Wall Street ($361) and the highest ($2,200) indicates significant uncertainty about the stock's future.

Can Micron shares really climb 86% in a year? Micron stock is certainly capable of climbing 86% in a single year. Its recent performance proves just as much. But analyst price targets may be discounting the long-term economics of the memory chip market.

Micron's gross margin soared to 85% in its most recent quarter. That's not a sustainable level for the business, and it's entirely bolstered by the industrywide supply shortage.

Micron's average gross margin as a public company is just 25%. Some argue that structural demand for high bandwidth memory for AI accelerator chips will reduce cyclicality and increase gross margin. Even so, margins will compress over time as supply catches up with demand. What's more, operating costs will increase due to additional overhead from increased output. The result is a significant drop in net income.

Analysts' price targets suggest Micron can greatly exceed its historic gross margin mid-cycle and avoid the worst of the downcycle. That seems predicated on the idea that long-term agreements will prevent a drop in earnings as severe as in past cycles.

There's still a chance, however, that long-term agreements merely pull demand forward, leading to a severe drop-off once contracts expire. So, while they might extend the up cycle, they could also extend the down cycle.

Investors should be cautious. Micron might be able to achieve a higher gross margin than in the past, thanks to AI and demand for high bandwidth memory. However, it's still going to see a severe drop in profits once new manufacturing capacity comes online. If demand for artificial intelligence dries up or even fails to meet expectations, the downcycle could be much worse than Wall Street is modeling right now.

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Memory and storage names are ripping higher into Wednesday’s close. SanDisk (NASDAQ:SNDK | SNDK Price Prediction) is up 6% to $1,344, while Micron Technology (NASDAQ:MU) has gained 5% to $911. South Korea’s SK Hynix (Nasdaq: SKHY) rallied alongside the group, closing the day up 9%, extending a global bid for memory.

Neocloud Demand Signal Ignites the Group The primary catalyst arrived pre-market from Nebius Group (NASDAQ:NBIS), whose Q2 2026 revenue of $582.30 million beat estimates and climbed 454% year over year. More consequential for memory investors: Nebius disclosed remaining performance obligations of $37.49 billion, alongside H1 2026 capital expenditures of $8.13 billion. That contracted backlog signals that hyperscalers and neoclouds are locking in multi-year GPU capacity, which requires proportional NAND, HBM, and enterprise SSD content. NBIS itself surged 34% to $259, and NVIDIA (NASDAQ:NVDA) added 3% as the read-through lifted the AI-infrastructure complex.

Micron’s own Q4 guidance of $50.0 billion ± $1.0 billion (see the company’s SEC filings) and CEO Sanjay Mehrotra’s line that “Micron’s record fiscal Q3 financial results and even stronger outlook for Q4 reflect the strategic value of memory in the AI era” remain the fundamental backbone here.

Model Competition Means More Infrastructure Sold The second tailwind is competitive pressure among frontier model builders. SpaceX just unveiled Grok 4.6, which Elon Musk called “objectively #1 when considering intelligence, speed & cost”. Independent benchmarker Artificial Analysis scored it 61 on its Intelligence Index, in line with GPT-5.6 Sol, at pricing near $2/$6 per 1M input/output tokens versus Claude Opus 5 at $5/$25 and GPT-5.6 Sol at $5/$30. The logic for memory holders is simple. Cheaper, faster models expand inference volume, which pulls more HBM, DRAM, and NAND through the stack. Sellers of the picks and shovels are the direct beneficiaries.

Product Momentum Reinforces the Rally Recent product news matters too. SanDisk and Kioxia introduced their 10th-generation QLC 3D NAND flash, achieving up to a 60% increase in bit density (exceeding 37 Gb/mm²) with a 4.8 Gb/s interface using their CMOS-directly-Bonded-to-Array design. That density and bandwidth profile is aimed squarely at AI-storage workloads, which showed up in SanDisk’s Datacenter revenue climbing 437% for the full fiscal year.

Peers Confirm the Move Western Digital rose 4% to $454, and Seagate Technology jumped 7% to $878. The whole complex is moving in the same direction on the same catalyst.

Year-to-date, the sector’s run has been dramatic. SanDisk is up 466.3%, Seagate is up 220%, and Micron is up 204%.

That run cuts both ways. Chinese entrants like CXMT and YMTC are climbing the technology ladder, memory remains a cyclical business, and valuations have stretched after outsized YTD gains. Prediction markets on Polymarket currently place a 50.5% probability on Micron closing above $900 by month-end, suggesting the crowd views today’s level as roughly fair.

What to Watch The next hard data point is NVIDIA’s earnings later this month, which the market treats as the master switch for AI-infrastructure sentiment. If hyperscaler capex commentary stays firm, memory should keep its bid. Keep an eye on whether SanDisk and Micron hold today’s gains into Thursday’s open.

Contact [email protected] for any questions or corrections.

UKRAINE - 2026/07/16: In this photo illustration, the Micron Technology logo is seen displayed on a smartphone. (Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images)

SOPA Images/LightRocket via Getty Images

This article was written by Doug Nathman, with research by his team at Trefis.

The memory shortfall that fueled the rise was detailed in Micron’s own supply announcements well before the price adjusted.

Micron Technology (MU) shares have increased by 708% in the last year, with the simple explanation being its involvement in the AI sector. The more precise reality is that the shortage causing the reevaluation of memory was outlined by the company in its disclosures regarding wafer capacity months ahead of the price increase.

Three Wafer Starts Needed for Each Standard DRAMThe first of these disclosures surfaced in December 2024, when the management documented the manufacturing calculations: generating a specific volume of bits as HBM3E, the high-bandwidth memory utilized by AI accelerators, requires approximately three wafer starts compared to one for conventional DRAM. Consequently, every bit sold as HBM used the wafer capacity equivalent to around three bits of standard DRAM. Concurrently, the management indicated that HBM was already exerting pressure on the supply of non-HBM.

The Company Indicated Its Supply Would LagBy March 2025, this same narrative had solidified into a prediction. Micron stated that its own supply growth for the calendar year 2025 would be below the growth in industry demand for both DRAM and NAND. The company’s HBM production for calendar 2025 was already fully booked. Additionally, Micron was intentionally downsizing its smaller business, reducing NAND wafer capacity by over 10% structurally by the end of fiscal 2025. These were declarations about Micron’s own supply, not forecasts regarding demand: a supplier informing the market it had decided to reduce production of its ordinary product.

The Quarter When Scarcity Became Pricing AuthorityThe mathematics impacted the income statement during fiscal Q3 2026. Revenue soared to $41.5 billion, a 346% rise year over year, as DRAM prices ascended in the low 60% range sequentially, and Micron has projected fiscal Q4 2026 to achieve a record $50 billion, give or take $1 billion. Scarcity is now embedded in contracts as well: 16 strategic customer agreements have been finalized, with customer cash deposits and related financial commitments under these agreements estimated at $22 billion. Memory typically does not maintain economics of this nature. On a trailing-twelve-month basis as of fiscal Q3 2025, just prior to the surge, the net margin was 18.4% compared to a three-year average of -1.3%, a positive indicator following three years of average losses. Sustainable margins and cash generation are among the criteria that the Trefis High Quality Portfolio prioritizes in its investments, and the memory sector has historically been challenging in terms of both.

Foreseeable Yet Impossible to QuantifyWere the indications actionable, or only clear now? The process was understandable: those who paid attention to these disclosures comprehended that memory was on the verge of a shortage that Micron’s own supply plan would exacerbate rather than alleviate. The scale was not clear. A stock does not multiply based on a wafer ratio, and nothing conveyed in December 2024 or March 2025 indicated a shift of this magnitude. The comparative returns convey the same narrative: during the same period, the S&P 500 returned 23%, and NVDA returned 25%, while WDC returned 490%. This was memory scarcity repricing, not the AI sector elevating all chip manufacturers uniformly. The consistent element is the practice, not the trade: follow a company’s own language regarding supply and outlook before the price reflects it, which is the purpose of a screen for companies whose guidance is improving.

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I keep buying Micron Technology (NASDAQ:MU | MU Price Prediction), and I am not planning to stop. The button gets pressed on green days and red days, and I sleep fine either way, because the story I bought into last year has hardened into something structural.

The core reason is simple: the old memory playbook, where every up cycle carries the seed of an oversupply crash, no longer describes this business. High Bandwidth Memory is a co-engineered subsystem shipped under multi-year, non-cancellable supply contracts with hyperscalers, not commodity DRAM sold on spot. On the Q3 FY26 call, CEO Sanjay Mehrotra told investors that “the memory industry has been structurally transformed by the proliferation of AI” and that Micron expects “tight conditions to persist beyond calendar 2027”. That is a supply chain statement, not a cycle statement.

Three Receipts I Keep Coming Back To Revenue durability that no memory business has ever had. Micron has signed 16 Strategic Customer Agreements, with $100 billion in remaining performance obligations and $22 billion of customer deposits and financial commitments already on the books. CFO Mark Murphy said that even at contract floor prices, “we expect the margins to be significantly above prior peak margins.” Floor pricing beats prior cycle peaks. Read it twice.

The Q3 FY26 numbers reflect structural demand, not cyclical dynamics. Revenue landed at $41.456 billion, up 345.72% year over year, GAAP gross margin hit 84.6% versus 37.7% a year earlier, and free cash flow ran $18.304 billion in a single quarter. Guidance for Q4 FY26 calls for $50.0 billion in revenue and $31.00 in non-GAAP EPS at the midpoint. Non-GAAP EPS for Q3 came in at $25.11, the seventh consecutive quarter of beats.

Valuation still is not stretched despite the run. Shares trade at $868.52 with a forward P/E of 6 and a trailing P/E of 20. The balance sheet shows $24.995 billion in cash against total liabilities of $33.39 billion and shareholders’ equity of $100.724 billion. This is a fortress funding its own capex.

Why Not the Obvious Alternatives The reflex trade for an AI thesis is NVIDIA (NASDAQ:NVDA). I keep coming back to Micron because NVIDIA’s accelerators cannot ship without HBM at bandwidth, and HBM is supply constrained. I want to own the constrained input, and Micron has already shipped over $1 billion in HBM4 revenue with a 12-high ramp tracking twice as fast as HBM3E 12-high. I also looked at Western Digital (NASDAQ:WDC) as the storage proxy and passed because WDC has no HBM franchise, which is the exact piece of the memory stack the AI buildout cannot substitute.

The Real Risk The real risk is customer concentration and capex intensity. The lead HBM4 customer is a large slice of the growth story, and capex ran $7.826 billion in Q3 alone. If AI infrastructure spending slows before the SCA book fully cures the cycle, this stock will feel it. My answer is that $100 billion of RPO across 14 signed agreements, structured as take-or-pay with floor pricing above prior peak margins, is the exact insurance policy I want against that scenario.

The dividend was raised 30% this year to $0.15 quarterly, and $650 million came back through buybacks over nine months. I buy for the compounding, and the compounding here is being contractually locked in for the next five years.

The buy button stays active.

Contact [email protected] for any questions or corrections.

Micron Technology’s profits are starting to resemble those of a dominant software company, but its stock is still trading like investors expect the memory cycle to peak.

The chipmaker posted a non-GAAP gross margin of 84.9% in fiscal Q3, up from 74.9% in the previous quarter and 39% a year earlier.

Management expects that figure to rise again to about 86% in Q4, alongside roughly $50 billion of revenue.

Yet Micron closed Tuesday at $868.52, up 0.9% for its first gain since the previous Wednesday but still about 31% below its June high of $1,255.

There is little in Micron’s latest results that looks like a business already weakening.

Fiscal Q3 revenue reached a record $41.46 billion, while non-GAAP operating margin hit 81.2%.

Operating cash flow was $25.39 billion, and adjusted free cash flow reached $18.3 billion.

The problem is that markets care less about where margins are today than where they go next.

Citi analyst Atif Malik recently cut his Micron target to $1,150 from $1,400 while maintaining a Buy rating.

Citi expects DRAM and NAND pricing momentum eventually to cool, pulling gross margins back towards the mid-70% range next year.

That helps explain why an 85% margin has not protected the shares. Investors are not necessarily saying Micron is weak today, but questioning how much of today’s extraordinary profitability can survive the next phase of the cycle.

Mizuho analyst Vijay Rakesh takes the other side.

Rakesh reiterated an Outperform rating and $1,375 target, arguing that DRAM and NAND supply could remain tight through at least 2027, with meaningful new capacity unlikely to affect the market until 2028.

He sees Micron sustaining gross margins above 80% as an important driver of further upside.

Deutsche Bank analyst Melissa Weathers has also argued that AI is making today’s shortage more severe than past memory cycles.

MarketWatch reported that she sees Micron’s broad portfolio and evolving business model giving it room to grow without sacrificing profitability.

Micron’s Strategic Customer Agreements strengthen that case. The company has signed multiyear deals designed to improve revenue visibility and reduce the volatility historically associated with memory pricing, with agreements covering about 20% of memory volume.

For investors using trading platforms to follow Micron, the key issue is therefore not whether current earnings are exceptional.

It is whether the market is applying an old cyclical valuation framework to a business whose economics are becoming more durable.

High-bandwidth memory may provide the clearest test.

UBS analyst Timothy Arcuri said HBM4 and HBM4E pricing was running “even stronger than our prior expectations.”. UBS now expects HBM average selling prices to rise 79% year on year.

Arcuri also believes Nvidia’s reported move to reduce memory specifications on Rubin Ultra could increase overall HBM consumption if it allows more accelerators to be produced.

Stronger server and SSD demand is supporting NAND pricing as well.

That leaves investors debating duration rather than demand.

Citi expects profitability to normalise. Mizuho, Deutsche Bank and UBS see tight supply, AI demand and longer-term customer agreements keeping margins elevated for longer.

Micron does not need an 85% margin forever for the sell-off to look excessive. It only needs profitability to stay unusually high for longer than investors currently expect.

Micron Technology (MU +0.87%) is one of the world's three top suppliers of memory chips, which play a critical role in the artificial intelligence (AI) hardware stacks in data centers, computers, smartphones, and even cars. There is a worldwide shortage of memory right now, which allows the manufacturers to dictate prices. For Micron, this resulted in a staggering 1,368% year-over-year increase in earnings to $24.67 per share during its most recently reported quarter.

A company growing at such a blistering pace would normally be expected to command a sky-high valuation as investors pile into its stock to get ahead of future potential returns. And investors have bid the stock up: Micron is sitting on a 12-month gain of around 640% -- but it's actually still trading at a steep discount to the S&P 500 (^GSPC -0.32%) and Nasdaq-100 indexes by one traditional valuation metric.

Normally, I would consider a stock like Micron to be a bargain at the current price. But here's why I'm not a buyer right now.

Image source: Getty Images.

Micron is unquestionably cheap at first glance During its fiscal 2026 third quarter (which ended on May 28), Micron generated a record $41.4 billion in revenue -- a 364% increase from the prior-year period. That result was driven by triple-digit percentage growth across all four of its business segments:

Segment

Fiscal Q3 Revenue

Revenue Growth (YOY)

Cloud memory

$13.7 billion

307%

Core data center

$11.5 billion

653%

Mobile and client

$11.5 billion

254%

Automotive and embedded

$4.6 billion

311%

Data source: Micron Technology. YOY = year over year.

Cloud memory is the category that includes Micron's sales of its high bandwidth memory (HBM) for data centers, where it sits alongside the graphics processing units (GPUs) supplied by chipmakers like Nvidia. HBM stores data in a ready state for GPUs so that they can access it rapidly, helping to maximize processing speeds. That's particularly valuable in intense AI training and inference workloads.

Suppliers like Micron have been reducing their production of other types of memory and reallocating that capacity to boost their output of HBM because demand for it is so strong.

Micron has now generated earnings of $44.23 per share over the last four quarters, placing its stock at a price-to-earnings (P/E) ratio of just 19.8. That's cheaper than both the S&P 500 and the Nasdaq-100, which have P/E ratios of 25.2 and 32.6, respectively.

But Micron's blockbuster financial performance is widely expected to continue. The average forecast among Wall Street analysts covering the company (provided by Yahoo Finance) suggests that its earnings will surge to $155.56 in its fiscal 2027, which begins in September. That gives the stock a forward P/E of just 5.6, which would normally constitute an irresistible bargain in my book.

Valuation isn't everything in this situation The semiconductor industry -- and particularly the memory segment -- has historically been extremely cyclical. In the past, companies would build data centers and upgrade them only once every few years, resulting in lumpy revenues for chipmakers. The AI boom has condensed the upgrade cycle to 12 months or less because companies like Nvidia and Micron keep bringing out faster chips to meet the market's insatiable demand for computing power.

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But this can't go on forever. The Financial Times reports that Amazon, Alphabet, Meta Platforms, and Microsoft have spent a combined $1.1 trillion on AI infrastructure since 2023, and they are still increasing their annual capital expenditures. That kind of spending makes economic sense only if there is a tangible return, but it appears that the end-users of AI are starting to feel the pinch financially.

Alphabet CEO Sundar Pichai recently said he is fielding complaints from Google Cloud customers about the rising cost of deploying AI. Moreover, a recent price increase by Anthropic for the use of its AI products caused Uber Technologies to blow through its entire 2026 AI budget in just four months. As a result, the company's chief operating officer said it's getting harder to justify the current rate of spending.

Uber has now imposed limits on AI usage for its employees, as have other large companies including Walmart, AT&T, and Amazon. If infrastructure costs keep rising, AI companies will have to continue hiking prices, and this will cause even more of their customers to watch their spending to prevent budget blowouts.

In my opinion, this explains why investors aren't piling into Micron stock despite its low P/E ratio. Even though the AI boom has distorted the cyclicality of the semiconductor industry, it's almost certainly a temporary phenomenon. AI infrastructure spending will eventually slow down. Plus, since Micron and its competitors are rapidly building more chip manufacturing capacity, they are also likely to surrender much of their pricing power in the future as new production comes online and helps ease the shortage -- or even creates a supply glut.

Simply put, it's possible that Micron's earnings could start shrinking in a couple of years as the supply-demand imbalance in the memory market is resolved. That would make its stock more expensive on a forward basis than it currently appears to be. As a result, I'm not buying it right now.

Every gold rush produces two kinds of investors: the ones betting on which prospector strikes it rich, and the ones who just sell the picks and shovels. The humanoid robot race has turned into exactly that kind of rush, with dozens of companies — American, Chinese, and everywhere in between — racing to put a walking, talking machine on a factory floor. 

Investors keep trying to guess which robot maker wins. That’s the wrong question. The right one is: what does every single robot need, regardless of who builds it or where it ships? The answer is memory, and that points investors toward a company that never shows up in the humanoid robot headlines at all — Micron Technology (NASDAQ:MU | MU Price Prediction).

The Robot Race Nobody Can Handicap Figure AI‘s Brett Adcock announced the company’s 1,000th Figure 03 unit on July 23, off a line running at roughly one robot per hour. China’s AgiBot rolled its 15,000th unit off the line in late June — and by its own disclosures, the jump from 5,000 to 10,000 units took just three months. TrendForce’s December 2025 forecast called 2026 the inflection year, projecting 50,000 humanoid shipments, up more than 700% from 2025.

Forbes says reality outpaced even that. Smart Analytics Global’s newest report puts global shipments at 19,100 units in the first half of 2026 alone – up 272% year over year — with the full year now tracking toward 60,000 units and 500,000 by 2030. Chinese vendors built 97% of them, and Chinese buyers absorbed 85% of demand. 

Meanwhile, the most documented American deployment — Figure’s fleet at BMW‘s Spartanburg plant — ran eleven months, helped build 30,000 X3s, and was retired in November for a newer model.

That’s the trap: China currently owns the volume, and picking the eventual global winner among Figure, AgiBot, Unitree, Tesla (NASDAQ:TSLA), and a few hundred others is genuinely unknowable this early.

Every humanoid needs 10x the memory of a smart car, but only three companies hold the keys to the supply. Forget the robot race and trade the structural supply squeeze instead. © 24/7 Wall St. Every Robot Needs a Landlord for Its Memory Here’s what skips the guessing game entirely. Whoever wins, every humanoid robot buys memory. On Micron’s fiscal Q3 earnings call, CEO Sanjay Mehrotra told investors a humanoid robot carries roughly ten times the DRAM content of today’s average L2+ driver-assist vehicle, and he expects a “sustained, substantial multi-decade memory demand cycle” to begin in the back half of this decade. A humanoid running multiple cameras continuously through a full shift needs serious bandwidth just to move that video through its model.

Only three companies make DRAM at scale: Micron, Samsung, and SK Hynix (NASDAQ:SKHY). Mehrotra said on that same call Micron has no line of sight to supply catching up with demand, with tightness persisting beyond 2027. Granted, 50,000 or even 500,000 robots’ worth of DRAM is negligible compared to data center consumption — a hyperscaler’s data center can have between 10 million and 20 million individual DRAM silicon chips. 

But that demand arrives after data centers have already claimed most of the available supply — and the training behind these fleets runs in data centers too, scaling with fleet size rather than chip count per unit. This thesis doesn’t require any of the predictions to land exactly; it just needs shipments to keep growing at the torrid pace companies are already announcing, while new fab capacity takes years to come online.

SK Hynix and Samsung have committed roughly $870 billion combined toward new capacity, but SK Hynix’s first new fab doesn’t open a clean room until February 2027, and Micron’s newly approved capacity doesn’t arrive until 2028.

Key Takeaway Investors don’t need to guess whether Figure, AgiBot, or Unitree wins the humanoid race. Every winner buys DRAM from one of three suppliers, and Micron trades at a fraction of the market’s growth multiple while supply stays structurally tight into 2028. That’s a memory trade, not a robotics bet — and it’s the more durable way in.

Contact [email protected] for any questions or corrections.

The mantra carrying the markets higher for years has been to leave it to mega-cap tech titans and AI leaders to drive the bulk of market gains, leaving cap-weighted indexes historically top-heavy. But a new narrative has begun to take over.

Key Takeaways Driven by market rotation, the Russell 1000 Value Index returned 32% over the past year versus Growth’s 14%. The S&P 500 forward P/E compressed from 22x to 19x as skepticism surrounding AI capex spending grew. Value and dividend ETFs saw huge flows, including Schwab’s SCHD ($16.5B inflows) and Avantis’ AVLV ($7 billion). Thanks to a broadening rotation — fueled by a decisive AI pivot, a sharp valuation reset, and index reconstruction — Value is finally stealing the show. The Russell 1000 Value Index has returned roughly 32% over the past year, compared to just 14% for Russell 1000 Growth.

With rates still elevated, mega-cap tech stocks entered the year priced to perfection. But as skepticism grew over AI capex spending, the bar became harder to clear. The S&P 500’s forward P/E multiple compressed from roughly 22 times earnings to 19 times earnings. High-duration tech names took the hardest hit, coming down from even higher multiples.

Source: Goldman Sachs, VettaFi

AI Boom: Driving Value’s Comeback AI spending has moved beyond software algorithms into massive physical infrastructure requirements. That capex boom is flowing directly into industrials, utilities, energy, and materials — sectors that have typically carried heavy weightings in value benchmarks but run structurally light amid growth indexes. As a result, value and dividend-focused ETFs are pulling in billions, reversing a multi-year trend of growth dominance.

The Index Construction Effect: Value Isn’t What It Used to Be Advisors looking under the hood will find that index construction has fundamentally evolved, blurring the lines between growth and value. For instance, June’s annual Russell reconstitution dramatically redefined benchmark exposures.

A few notable changes: Amazon (AMZN) is now the single largest Russell 1000 Value holding. Microsoft (MSFT) and Apple (AAPL) sit as major constituents in both Growth and Value. High-flying chip makers like AMD and Micron (MU) were rebalanced out of Value after already fueling its run.

Data from State Street (as of July 27) highlights an even starker divergence: Technology stocks classified as Value have outperformed Growth-classified tech stocks by nearly 70% this year.

Where the Value Money is Flowing Money managers are deploying capital across five distinct ETF buckets:

Active Large-Cap Leaders: Advisors seeking disciplined, high-conviction security selection are increasingly looking beyond cap-weighted benchmarks. The Capital Group Dividend Value ETF (CGDV) and the Avantis U.S. Large Cap Value ETF (AVLV) have dominated active category flows, each drawing roughly $7 billion in net YTD inflows. Both funds highlight a growing advisor appetite for active stock-picking in an environment where single-stock dispersion is widening. Core Passive Large-Cap Value: Traditional index-based funds remain the foundational anchor for portfolios de-risking from mega-cap tech concentration. The Vanguard Value ETF (VTV) has gathered $6 billion in net new assets year to date. With its ultra-low fee structure and structural overweights to cash-generative sectors like financials, healthcare, and industrials, VTV serves as a core rebalancing tool. High-Quality Income: Yield-focused strategies continue to attract steady defensive allocations amid shifting rate expectations. The Schwab U.S. Dividend Equity ETF (SCHD) remains a staple for income-oriented accounts, combining strict valuation discipline with high-quality dividend growth to cushion portfolios against real-yield volatility. The $106 billion fund has consistently led the charts among dividend-focused ETFs, hitting the number one spot on multiple periodic flow leaderboards with over $16.5 billion in net creations and is up 26% on a NAV basis. Value Beyond the Border: As concentration concerns linger in domestic indexes, advisors are looking abroad for deeper valuation discounts. The Dimensional International Value ETF (DFIV) has captured $3 billion in net inflows, giving investors targeted exposure to low-P/E developed market equities across Europe and Asia. Free-Cash-Flow Quality: Beyond traditional price-to-book or price-to-earnings metrics, profitability-screened strategies are capturing significant market share. The VictoryShares Free Cash Flow ETF (VFLO) highlights how “quality cash generation” acts as a powerful factor filter. VFLO has scaled to $9 billion in AUM on the back of a 32% year-to-date return, proving that rules-based cash-flow screening is driving real capital alongside traditional value metrics. Rotation, Not Revolution This factor shift isn’t a signal that tech is failing or growth is dead — corporate earnings across technology and AI remain exceptional. Rather, this cycle reads more like a healthy mean-reversion trade within a secular growth bull market rather than a permanent regime change.

Instead of abandoning secular growth entirely, advisors may want to consider a barbell strategy. Pairing core secular tech holdings with cash-generative, dividend-paying or free-cash-flow value ETFs allows client portfolios to maintain upside participation while cushioning against single-sector valuation compression.

For more news, information, and analysis, visit VettaFi | ETF Trends.

VettaFi LLC (“VettaFi”) is the index provider for VFLO, for which it receives an index licensing fee. However, VFLO is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of VFLO.

Despite the seemingly recurring tech selloffs that continue to target AI and chip stocks in particular, Micron Technology (NASDAQ:MU | MU Price Prediction) shares remain up 177% year to date through Aug. 10, dwarfing the S&P 500 and the broader semiconductor tape. The headwind for the bears is right there in the recent tape: a 17% one-week drawdown from an early-June high of $1,079.57 to a recent print around $925. The narrative has shifted to overheated positioning, cyclical memory fears, and post-rally profit-taking.

Investors are overlooking the operating reality. Micron’s most recent quarter delivered the strongest fundamental results in the company’s history, and management has already guided to another step-up. Q3 2026 earnings on June 24 proved the long-term setup is in place for Micron to reset the narrative.

Micron’s HBM and Cloud Memory Strength Should Drive a Beat Management’s official fiscal Q3 2026 guidance called for revenue of $33.50 billion, plus or minus $750 million, with non-GAAP diluted EPS of $19.15, plus or minus 40 cents, and gross margin near 81%. CEO Sanjay Mehrotra told investors the company expects “significant records again in fiscal Q3.”

That materialized, and then some. When the company reported in late June, revenue came in at $41.46 billion. EPS $25.11 beat analyst expectations of $21.39 by $3.72. The company also posted a gross margin of 84.9%.

The company said it has signed 16 strategic customer agreements covering data center, consumer, auto and other markets, which it believes will transform its business model. Management said these agreements represent about 20% of DRAM volume and one-third of NAND volume over the period, with roughly $22 billion in deposits and financial commitments tied to them. AI-driven demand is keeping DRAM and NAND supply tight and expects those conditions to persist beyond calendar 2027.

Micron is expanding capacity through major fab investments in Idaho, New York, Taiwan, Japan, Singapore and Virginia, while keeping capital spending disciplined. It plans fiscal Q4 CapEx of about $10 billion and said it intends to increase capital returns beginning after the December 2026 CHIPS-related milestone.

The Stock Looks Attractive at Current Levels Micron trades at a forward P/E of just 11.99, a premium to the broader market, but the forward earnings ramp justifies it. The Street’s forward EPS estimate sits at $158 for coming 12 months, which compresses the forward multiple meaningfully given the Q3 run rate.

Analyst conviction is overwhelming. Out of the coverage universe, 89% rate Micron a Buy, with 39 Buy ratings against just one Sell rating. The 12-month consensus price target stands at $1,260.31, which is more than 44% higher than where the stock trades today.

Contact [email protected] for any questions or corrections.

MU's take-or-pay deals lock in customer commitments, pricing protections and contracted revenues, boosting sales visibility through 2030.

Micron stock has stuttered in recent weeks but Mizuho's Vijay Rakesh is confident it will only be a blip.

7.19K Followers

Analyst’s Disclosure: I/we have a beneficial long position in the shares of MU, SKHYV, 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.

Although Micron Technology, Inc. (Nasdaq: MU) stock has dropped over 29% since mid-June 2026, Wall Street analysts expect the company’s shares to reach a new all-time high (ATH) over the next 12 months.

Vijay Rakesh, an expert at Mizuho Securities, reiterated a ‘Buy’ rating for Micron stock, according to a note sent to clients that Finbold analyzed on August 11. Rakesh maintained the firm’s 12-month price target for MU at $1,375, suggesting a potential 59.7% upside.

Mizuho raised its 12-month MU stock price target from $1,150 to $1,350 on June 25, 2025. Despite the notable correction since the target lift, Rakesh maintained a Buy rating for this memory stock.

The research firm expects the core Dynamic Random-Access Memory (DRAM) and NAND memory chip market to remain structurally tight through 2027, fueled by the AI boom. Moreover, this analyst does not expect a meaningful supply of memory chips from competitors until 2028, thus bolstering bullish sentiment for Micron stock.

As such, Rakesh downplayed recent fears of Apple Inc. (NASDAQ: AAPL) seeking memory hardware supply from China’s ChangXin Memory Technologies (SSE: 688825). 

Wall Street bullish on Micron stock In addition to Mizuho Securities, Atif Malik at Citigroup Inc. (NYSE: C) and Timothy Arcuri reaffirmed a ‘Buy’ rating for MU shares. Malik, however, lowered the bank’s 12-month price target to $1,150 from $1,400, suggesting a possible 33.57% rise.

On the other hand, Arcuri expects Micron stock to reach $1,625 over the next 12 months, a potential 88.73% uptick. Consequently, 30 Wall Street analysts surveyed by TipRanks have set an average 12-month price target of $1,569.07 for MU, an expected 82.24% gain.

Over the last 6 months, MU’s share price has spiked over 107%, trading at approximately $861 at press time. As a result, the company had a market capitalization of roughly $972.4 billion.

MU’s 6-month chart. Source: Finbold  Amid the strong demand for memory chips, Wall Street analysts argued that the recent MU selloff could be viewed as a temporary correction rather than a market reversal.

Featured image via Shutterstock

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SK Hynix (SKHY -1.90%) gave American investors an easy way to buy its stock with its debut on the Nasdaq last month. The Korean company is one of three memory chipmakers whose valuations have soared amid growing demand for memory chips to address one of the biggest bottlenecks in artificial intelligence (AI) right now. One of its biggest rivals, Micron Technology (MU -1.89%), has produced tremendous earnings growth as well, as pricing for its chips climbs month after month.

Micron has long been the easiest way for American investors to buy into the memory chip shortage. But with SK Hynix's debut last month, they now have another option. Which stock should you choose?

Image source: The Motley Fool.

A discount and an important relationship Due to the cyclical nature of memory chip stocks, both Micron and SK Hynix trade for very low price-to-earnings ratios. Micron trades for about 5.7 times expected earnings for fiscal 2027 ending next August. SK Hynix, however, trades for even less, just 5 times forward earnings estimates.

That discrepancy exists despite the two companies sharing similar revenue growth and operating margin potential. In fact, one could argue SK Hynix is better positioned than Micron over the next few quarters, given its lead in high-bandwidth memory (HBM) chip production and close relationship with Nvidia (NVDA -2.86%).

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Nvidia announced an agreement with SK Hynix to secure supply of HBM chips for multiple years. The contract could be worth $500 billion, according to reports. SK Hynix management noted that despite slower-than-anticipated HBM4 sales in the second quarter, it expects a ramp-up in the back half of the year to bolster sales and average selling price for its chips. Its close relationship with Nvidia could be what gives it that confidence.

At the same time, locking in pricing with Nvidia through a long-term agreement could cap the peak of SK Hynix's earnings cycle. It's the trade-off both chipmakers have been making in recent quarters: less upside today in exchange for more predictability and less downside in the future. Micron has also struck several long-term agreements, representing about 20% of DRAM chip revenue and one-third of NAND chip revenue.

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Still, analysts currently price SK Hynix at a significantly lower multiple of peak earnings than Micron. Analysts expect both to peak in 2028, but Micron shares trade at close to 5.5 times fiscal 2028 earnings, while SK Hynix trades at just 3.5 times 2028 earnings. Combined with SK Hynix's current position with Nvidia, that makes the Korean company a better way to invest in the memory supercycle right now.

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

Micron Technology Inc (NASDAQ:MU)'s earnings power looks headed for a structural reset, according to UBS, which pointed to memory supply so tight that Nvidia was forced to de-spec its upcoming VR300 GPU.

UBS said Nvidia was forced to scale back the amount of high bandwidth memory, or HBM, in each VR300 GPU due to tight supply, cutting planned content to 512GB of HBM4E per chip from 768GB. VR300 is part of Nvidia's upcoming Rubin Ultra lineup of AI accelerators. The reduced memory content lets Nvidia build more GPUs with the same constrained memory supply, and the bank said the resulting increase in VR300 shipments is significant enough to lift its overall 2027 HBM consumption estimate to 61.5 billion gigabits, up from a prior 58.7 billion.

The bank also pointed to a re-widening of the price premium between HBM and DDR DRAM, a trend it said it has been highlighting since April. UBS now models 2027 industry blended HBM average selling price up approximately 79% year over year, compared with a prior estimate of 67%, with HBM4E likely to reach more than $30 per gigabyte.

On NAND, UBS said third-quarter contract pricing continues to trend positively as server and storage SSD demand offsets weakness in smartphones and PCs, though the magnitude of quarterly price increases is tracking modestly below its prior expectations. The bank raised its NAND industry bit demand growth forecasts to 23% for 2026 and 26% for 2027, and now forecasts industry NAND revenue of approximately $300 billion in 2026 and $495 billion in 2027.

For Micron specifically, UBS adjusted its earnings per share estimates for fiscal 2026, 2027 and 2028 to $74.13, $184.89 and $265.65, respectively, which it said remain well above consensus. The bank said its estimates reflect Micron EPS staying above $160 in 2029 and the company generating more than $450 billion in cumulative free cash flow through 2028.

UBS maintained its $1,625 price target based on approximately 11 times its estimated 2029 earnings per share of about $165, discounted back one year.

Micron Technology (MU), the memory-chip giant sitting squarely in the middle of the AI spending boom, has its shares gained roughly 1.8% Monday morning. Investo

Micron Technology Inc (NASDAQ:MU)'s earnings power looks headed for a structural reset, according to UBS, which pointed to memory supply so tight that Nvidia was forced to de-spec its upcoming VR300 GPU.

UBS said Nvidia was forced to scale back the amount of high bandwidth memory, or HBM, in each VR300 GPU due to tight supply, cutting planned content to 512GB of HBM4E per chip from 768GB. VR300 is part of Nvidia's upcoming Rubin Ultra lineup of AI accelerators. The reduced memory content lets Nvidia build more GPUs with the same constrained memory supply, and the bank said the resulting increase in VR300 shipments is significant enough to lift its overall 2027 HBM consumption estimate to 61.5 billion gigabits, up from a prior 58.7 billion.

The bank also pointed to a re-widening of the price premium between HBM and DDR DRAM, a trend it said it has been highlighting since April. UBS now models 2027 industry blended HBM average selling price up approximately 79% year over year, compared with a prior estimate of 67%, with HBM4E likely to reach more than $30 per gigabyte.

On NAND, UBS said third-quarter contract pricing continues to trend positively as server and storage SSD demand offsets weakness in smartphones and PCs, though the magnitude of quarterly price increases is tracking modestly below its prior expectations. The bank raised its NAND industry bit demand growth forecasts to 23% for 2026 and 26% for 2027, and now forecasts industry NAND revenue of approximately $300 billion in 2026 and $495 billion in 2027.

For Micron specifically, UBS adjusted its earnings per share estimates for fiscal 2026, 2027 and 2028 to $74.13, $184.89 and $265.65, respectively, which it said remain well above consensus. The bank said its estimates reflect Micron EPS staying above $160 in 2029 and the company generating more than $450 billion in cumulative free cash flow through 2028.

UBS maintained its $1,625 price target based on approximately 11 times its estimated 2029 earnings per share of about $165, discounted back one year.

HomeIndustriesComputers/ElectronicsTech StocksTech StocksAn analyst says that Nvidia’s move to downgrade some chip capabilities could end up boosting consumption of high-bandwidth memoryAug. 10, 2026, 3:42 p.m. ET

Nvidia is making a change that could provide a further boost to Micron Technology, according to new analysis.

UBS analyst Timothy Arcuri wrote Monday that he believes Nvidia NVDA has moved to “de-spec” its upcoming Rubin Ultra offering, referring to the practice of downgrading certain capabilities of its chip. The Information reported that Nvidia is testing different versions of the chip with less memory due to concerns over high-bandwidth-memory supply.

After a strong recovery bounce for the semiconductors and most other names tied to the AI trade that Dr. Michael Burry is betting against by way of bearish put options, the big question is whether Dr. Burry has gotten the timing wrong or perhaps the whole bearish thesis about the AI trade as a whole. Undoubtedly, valuations on a number of names are certainly hard to justify. Whether we’re talking about Palantir (NASDAQ:PLTR | PLTR Price Prediction), Tesla (NASDAQ:TSLA), or even Caterpillar (NYSE:CAT), it’s easy to see why Dr. Burry has set his sights on such names.

At the same time, overvaluation and overbought conditions don’t necessarily mean that a short will be a walk in the park. Overvalued stocks can stay the way for quite a while and, what’s more, they can become even more overvalued. In the case of Palantir and the many AI names that are shrouded in uncertainty, I do think that it’s just as risky to bet against as it is to go long, especially with put options where timing is everything.

Dr. Burry is onto something, but the big question is whether he’s too early While Dr. Burry’s track record speaks for itself, the big question this time around is whether he’s early. And, if he is, how long it’s going to take before the names on his radar finally do implode. It’s been a wild ride for AI stocks this summer. And it’s easy to get startled at the first signs of heightened volatility. Of course, volatility works in both directions, which is what makes following Dr. Burry’s shorts unadvisable.

With Dr. Burry recently bringing up 1987 and the potential for a market top, questions linger as to how things will end for the AI high-flyers that have been met with heightened expectations and increasing skepticism about the longevity of their glorious runs, which, in the case of semiconductors, tends to be cyclical. At least that’s what history suggests.

Though, things may very well be different this time around with the AI revolution. Regardless, I think bearish bets against Micron (NASDAQ:MU), Nvidia (NASDAQ:NVDA), and more aren’t going to be covered so easily, especially now that Dr. Burry doesn’t have to answer to anybody else. It’s not like he’s running the show over at Scion Asset Management anymore.

Michael Burry must short, but you most certainly shouldn’t As leverage piles up and more Situational Awareness (margin call unwinds) hit at scale as volatility stays heightened, perhaps the next big correction could be a painful one, maybe one that goes deep into bear market territory before a bottom can be put in. With a Substack to update everyone on, my guess is that he’ll be true to his word: he’ll short, even though most shouldn’t follow. Indeed, perhaps such a dangerous stunt is best left to the professionals.

While the leverage is piling up and it could make the eventual downfall so much more painful, time will tell when the unwind happens and whether AI innovation can somehow live up to or even surpass expectations. That’s the big upside risk that Dr. Burry is taking.

Oracle is Dr. Burry’s most confusing short For the most part, Dr. Burry’s bearish bets seem to make a lot of sense. He’s mostly betting against momentum and frothy multiples, perhaps with the exception of Oracle (NYSE:ORCL), in which he initiated a new bearish bet last week.

That’s the one AI short that I don’t get. Yes, excessive leverage to go all-in on the AI buildout is never a good idea. But, at the same time, the stock has already crashed, and it’s starting to look dirt-cheap, even with all that debt, dilution, and, more recently, a credit downgrade.

There’s a price at which even the unappetizing company in the world becomes a buy. And with the OCI backlog coming for cheap (or even close to “free”), I’d much rather go long in Oracle than short at 16.0 times forward price-to-earnings (P/E), especially as the RPOs convert and OpenAI improves its financial footing.

Even if a 1987-esque crash hits, I think it’ll be a great opportunity to pick up quality that’s dragged into the wreckage. While the 1987 stock market crash hit fast and hard, those who held on for the next two years ended up just fine. As such, I don’t think there’s any sense racing to the hills just yet.

Contact [email protected] for any questions or corrections.

Micron (MU -0.44%) stock got hit with a big pullback in July's trading. The memory-chip leader's share price fell 28.7% in a month that saw the S&P 500 trade roughly flat and the Nasdaq Composite's level fall by 2.6%, according to data from S&P Global Market Intelligence.

On the heels of massive gains across the first half of 2026, Micron stock suffered a huge sell-off in July in response to earnings reports and guidance from South Korean memory chip leaders and potential threats posed by the rise of competition from Chinese companies. In addition to those bearish catalysts, Micron's share price was also pressured by macroeconomic and geopolitical dynamics.

Image source: Getty Images.

July was a brutal month for many AI hardware stocks Micron stock moved lower in July due to broad concerns that artificial intelligence (AI) hardware stocks were overvalued, the market's negative reaction to Samsung's capital expenditures guidance, and fears that competition from Chinese companies could hurt pricing power. Then, South Korea's SK Hynix posted its second-quarter results on July 28 -- and the market was not happy with the results. While the company delivered robust sales and earnings growth in the period, the performance actually fell substantially short of analysts' expectations. SK Hynix is another major player in the memory chip industry, and some investors interpreted the company's sales and earnings miss in Q2 as an indication that expectations for Micron may have been overly lofty as well.

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Along with those pressures, Micron stock also lost ground last month due to concerns about the Iran war and inflationary trends. Strikes between the U.S. and Iran reescalated last month, creating another source of volatility for the broader market. While energy prices declined in June thanks to a drawdown in the conflict, they began climbing rapidly again last month. With oil prices rising due to disruptions in shipping through the Strait of Hormuz, investors became fearful of a reacceleration of inflation and potential moves to raise interest rates from the Federal Reserve.

Micron stock has regained some ground in August's trading As of this writing, Micron stock is down roughly 6.6% in August's trading. On the other hand, the company's share price has continued to face pressures connected to fears that its rapid growth could be dampened by the emergence of Chinese competitors offering capable memory chips at significantly lower prices.

Top memory chip companies have enjoyed incredible pricing power as demand for AI processing systems that feature the hardware has continued to skyrocket. While there's currently no indication that Chinese chip companies can deliver HBM solutions that top Micron's when it comes to overall performance, a surge in the availability of capable memory chips could still have a significant adverse impact on the company's pricing power.

The good news for Micron investors is that the demand outlook for high-performance memory chips still looks very strong, and the company has signed long-term contracts at very favorable pricing levels that should continue to support very strong performance through the next several years. It remains to be seen how the competitive dynamics and pricing environment in the memory chip market will evolve going forward, but Micron is likely to retain a forefront position when it comes to high-end chips -- and its stock will continue to play a significant role in influencing the AI trade and movements for the broader market.