Micron's stock has fallen 18% from its June record high, and the memory chipmaker's past boom-and-bust cycles suggest a deeper pullback is possible. The Motley Fool argues the AI-driven demand for memory chips could make this cycle last longer than earlier ones.
Micron's stock closed at a record high of $1,255 per share on June 25, 2026. It now trades at about $1,030 per share, an 18% pullback.
Past memory cycles ended in steep drops
Micron is one of the world's largest producers of DRAM and NAND (flash) memory chips, and the memory market has gone through boom-and-bust cycles for decades. Chipmakers typically ramp up production when demand outstrips supply, but shortages eventually turn into gluts when they make too many chips.
As a result, the stock has seen steep peak-to-trough drawdowns: 73% from 2014 to 2016, 55% in 2018, 43% in 2020, 51% in 2021, and 36% in 2024. Based on that history, the current 18% decline could merely be the beginning of a deeper pullback.
AI demand could stretch the current cycle
The Motley Fool's Leo Sun argues the trend could break this time. Starting in 2024, the AI boom created demand for high-bandwidth memory (HBM) chips, which pair with Nvidia's data center GPUs in AI clusters.
However, making HBM chips requires three times the wafer capacity of a standard DRAM chip. Micron's higher HBM output therefore throttled its own DRAM supply for PC, mobile device, and server markets. Competitors Samsung and SK Hynix have also grappled with the imbalance, which drove up memory prices across the board.
Bulls believe those tailwinds will lengthen the current cycle. From fiscal 2026 to fiscal 2028, analysts expect revenue and EPS to grow at CAGRs of 55% and 67%, respectively. The stock trades at six times this year's earnings, according to the article, which calls that surprisingly cheap.
The article concludes that the AI catalysts could drive the stock much higher before supply catches up to demand, even though a steeper pullback might eventually come. The article says investors shouldn't rely on historical data to predict the stock's future growth.
Source: The Motley Fool
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