Key Takeaways
- Micron shares declined 1.4% to $977.92 during Friday’s premarket session following SK Hynix’s Nasdaq ADR launch
- SK Hynix’s $26.5 billion capital raise could intensify competition in the memory chip space
- BofA Global Research maintains Buy rating with $1,550 price objective for Micron
- Company boosts U.S. capital expenditure pledge from $200 billion to $250 billion by 2035
- Major technology companies expected to allocate approximately $1.5 trillion toward cloud and AI infrastructure by 2027, with memory chips representing 35–40%
Micron shares experienced a 1.4% decline to $977.92 during Friday’s premarket hours as South Korean competitor SK Hynix launched its American depositary receipts on the Nasdaq exchange.
The premarket weakness followed Thursday’s impressive 7.8% surge that pushed Micron to $1,022. Despite this short-term pullback, the stock has soared more than 200% throughout 2026, although it remains below the $1,200-plus peaks reached in late June.
The introduction of SK Hynix’s U.S.-traded shares provides American investors with an alternative avenue for memory chip exposure. According to Barron’s analysis, the ADRs represent a more affordable entry point into the memory semiconductor sector than Micron, potentially attracting investors seeking diversified exposure across both companies.
SK Hynix plans to deploy $26.5 billion in capital through this listing. These substantial funds could be directed toward expanding production capabilities, potentially intensifying competition for Micron in upcoming years.
Despite these competitive dynamics, Wall Street analysts remain optimistic. BofA Global Research analyst Vivek Arya maintained his Buy recommendation on Micron this week, establishing a $1,550 price objective.
Arya projects that major technology firms will deploy approximately $1.5 trillion on worldwide cloud and artificial intelligence infrastructure by 2027 — representing a 40% to 50% increase from present levels. Memory components are anticipated to comprise 35% to 40% of this substantial investment.
“We believe the market is underestimating the transition toward longer-duration agreements and more predictable pricing,” Arya wrote. “As memory evolves from a cyclical commodity to a strategic AI enabler, multiples should expand.”
His $1,550 valuation employs a sum-of-the-parts methodology — assigning approximately 3x price-to-book for Micron’s conventional memory operations and 31x price-to-earnings for its high-bandwidth memory division, both utilizing 2028 projections.
Company Expands U.S. Manufacturing Investment to $250 Billion
On Thursday, Micron revealed plans to increase its domestic investment commitment to $250 billion through 2035, exceeding its earlier $200 billion pledge. The chipmaker stated this enhancement advances its objective of manufacturing 40% of DRAM production within the United States.
The expanded blueprint encompasses a $100 billion New York facility initially unveiled in 2022, with manufacturing operations anticipated to commence in 2030.
Micron additionally announced plans to allocate up to $3 billion toward reinforcing America’s semiconductor supply infrastructure. This includes $500 million in financial assistance for GlobalWafers to develop a silicon wafer manufacturing facility in Sherman, Texas, supported by a decade-long supply contract.
Sector Experts Dismiss Oversupply Concerns
Hendi Susanto, portfolio manager at the Gabelli Global Technology Leaders ETF, rejected worries about excessive capacity entering the marketplace.
“The main players — Samsung, SK Hynix, and Micron — have demonstrated discipline on capacity expansion for many years now,” Susanto said. “The current market outlook is still expecting demand higher than supply in 2027.”
Micron shares finished Thursday’s regular session up 4.52% before experiencing Friday’s premarket decline.
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