Micron's shares have given back roughly 23% since the stock's market cap crossed $1 trillion in May 2026, even as the chipmaker posts surging revenue and record margins on AI memory demand. The question now is whether that demand can outrun rising competition from SK Hynix and Samsung, with Micron's fiscal fourth-quarter earnings due September 30.
Micron Technology's stock has fallen about 23% from the peak it hit after its market cap crossed $1 trillion in May 2026, as investors debate how long AI-driven demand for memory chips can keep supporting the company's results.
Record quarter built the bull case
The rally rested on Micron's fiscal third quarter of 2026, when revenue hit $41.46 billion, a 346% jump from a year earlier. Adjusted earnings per share reached $25.11, and gross margins climbed to nearly 85%, a record for the company.
High-bandwidth memory, which moves data fast enough to keep AI accelerators such as Nvidia's H100 and B200 chips from sitting idle, drove that pricing power. CEO Sanjay Mehrotra said AI has "structurally transformed the memory industry," though he noted supply improvements will arrive gradually with no clear timeline for closing the gap with demand.
Contracts lock in years of demand
Micron has signed 16 Strategic Customer Agreements carrying $22 billion in commitments and $100 billion in performance obligations running through 2030. The take-or-pay deals require customers to buy a set volume regardless of where spot prices move.
On September 15, 2026, the company launched what it called the world's first 512GB DDR5 RDIMM, a data-center memory module it says delivers 1.4 times the performance of earlier configurations while using more than 60% less power. For fiscal Q4 2026, Micron guided revenue toward approximately $50 billion, well above analyst estimates, with adjusted EPS projected around $31.27; the formal report lands September 30.
Skeptics point to fiercer competition
But rivals are closing in. SK Hynix, the current leader in HBM production, is aggressively expanding capacity, while Samsung is working to qualify its latest HBM chips with Nvidia after stumbling in its early execution. Micron's own guidance acknowledges supply conditions should improve after 2028, and margins near 85% are, by definition, hard to sustain.
UBS analyst Timothy Arcuri frames the stock as caught between momentum and staying power, but says he remains upbeat on Micron's fundamentals as the gap between memory-chip supply and demand is expected to keep widening into next year. Micron's September 30 earnings report will show whether that guidance holds.
Sources: Crypto Briefing, MarketWatch (snippet-based)
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