Blab Tech
Micron Shares Slide Amid AI-Spending Fears, Despite Strong Earnings and Ongoing Memory Demand
When Micron’s shares slipped 27% since mid‑June, investors were left wondering whether the company’s record‑breaking earnings were being eclipsed by a broader fear that AI spending is cooling.
Micron Technology’s fiscal third quarter, which ended May 28, saw sales surge 345% to $41.5 billion and earnings per share jump 1,200% to $25.11. The company’s market capitalization topped $1 trillion on May 26, and its shares have climbed 720% over the past year. Yet, despite these impressive numbers, the stock fell 6.7% on June 26 after reaching a high of $1,132.33.
The sell‑off is part of a wider downturn in semiconductor stocks. A CNBC report noted that 20 of the world’s most valuable semiconductor companies—including Micron—lost a combined $1.3 trillion in market‑cap value during July. Analysts view the decline as a short‑term profit‑taking move rather than a sign of a lasting shift in demand.
Investor anxiety centers on the perception that the current AI‑driven chip boom may be slowing. However, recent corporate guidance points to continued acceleration in AI infrastructure spending. Alphabet, the parent of Google, raised its 2026 capital‑expenditure guidance to $205 billion, up from a prior range of $180‑$190 billion. Alphabet’s quarterly cap‑ex rose to $44.9 billion, and the company reported an 82% increase in cloud revenue.
Amazon has also signaled a sustained expansion of AI‑related spend. In its July 30 earnings call, the company announced a 2026 cap‑ex target of $220 billion, a 66% increase from 2025 levels. The higher spend is attributed to rising memory chip prices and the need to support its growing data‑center footprint.
These corporate commitments align with broader industry forecasts. Gartner projects global AI spending to reach $2.59 trillion in 2026, a 47% increase over 2025. The continued demand for high‑performance memory—particularly DRAM and high‑bandwidth memory (HBM)—supports Micron’s outlook. Management expects the memory shortage to persist at least through 2027, while rival SK Hynix projects a shortage that could last until 2030.
Micron’s robust earnings, coupled with the ongoing AI‑driven demand for memory chips, suggest that the recent stock decline may be a temporary market reaction. As one of the “Big Three” memory manufacturers, alongside Samsung Electronics and SK Hynix, the company enjoys a solid footing in the sector.
At present, Micron’s shares remain volatile as the market adjusts to the broader semiconductor sell‑off. Investors will likely keep a close eye on upcoming earnings releases, corporate cap‑ex guidance, and any regulatory developments that could affect data‑center expansion. The company’s next quarterly report, scheduled for late September, will provide further insight into whether the AI spending momentum continues to support its growth trajectory.
Micron Technology’s fiscal third quarter, which ended May 28, saw sales surge 345% to $41.5 billion and earnings per share jump 1,200% to $25.11. The company’s market capitalization topped $1 trillion on May 26, and its shares have climbed 720% over the past year. Yet, despite these impressive numbers, the stock fell 6.7% on June 26 after reaching a high of $1,132.33.
The sell‑off is part of a wider downturn in semiconductor stocks. A CNBC report noted that 20 of the world’s most valuable semiconductor companies—including Micron—lost a combined $1.3 trillion in market‑cap value during July. Analysts view the decline as a short‑term profit‑taking move rather than a sign of a lasting shift in demand.
Investor anxiety centers on the perception that the current AI‑driven chip boom may be slowing. However, recent corporate guidance points to continued acceleration in AI infrastructure spending. Alphabet, the parent of Google, raised its 2026 capital‑expenditure guidance to $205 billion, up from a prior range of $180‑$190 billion. Alphabet’s quarterly cap‑ex rose to $44.9 billion, and the company reported an 82% increase in cloud revenue.
Amazon has also signaled a sustained expansion of AI‑related spend. In its July 30 earnings call, the company announced a 2026 cap‑ex target of $220 billion, a 66% increase from 2025 levels. The higher spend is attributed to rising memory chip prices and the need to support its growing data‑center footprint.
These corporate commitments align with broader industry forecasts. Gartner projects global AI spending to reach $2.59 trillion in 2026, a 47% increase over 2025. The continued demand for high‑performance memory—particularly DRAM and high‑bandwidth memory (HBM)—supports Micron’s outlook. Management expects the memory shortage to persist at least through 2027, while rival SK Hynix projects a shortage that could last until 2030.
Micron’s robust earnings, coupled with the ongoing AI‑driven demand for memory chips, suggest that the recent stock decline may be a temporary market reaction. As one of the “Big Three” memory manufacturers, alongside Samsung Electronics and SK Hynix, the company enjoys a solid footing in the sector.
At present, Micron’s shares remain volatile as the market adjusts to the broader semiconductor sell‑off. Investors will likely keep a close eye on upcoming earnings releases, corporate cap‑ex guidance, and any regulatory developments that could affect data‑center expansion. The company’s next quarterly report, scheduled for late September, will provide further insight into whether the AI spending momentum continues to support its growth trajectory.
