Key Takeaways
- Micron shares dropped 4% premarket Wednesday to $900.50, extending Tuesday’s 4.7% decline that marked entry into bear market territory (over 20% below recent peak)
- Trump’s declaration that the U.S.-Iran cease-fire is “over” drove oil prices upward and heightened inflation and interest rate concerns
- Memory chip competitors Samsung and SK Hynix in South Korea both tumbled nearly 6% Wednesday
- Analysts maintain an average MU price target of approximately $1,576, with Morgan Stanley suggesting current prices could offer a “good entry point”
- Micron’s quarterly revenue has jumped from $23.9B to $41.5B recently, with expectations of roughly $50B next quarter
Shares of Micron Technology (MU) declined 4% to $900.50 during Wednesday’s premarket session, building on Tuesday’s 4.7% slide that officially placed the semiconductor stock in bear market territory — characterized by a decline exceeding 20% from its latest peak.
The downturn came after President Donald Trump announced Wednesday morning that the cease-fire between the U.S. and Iran had ended, triggering a spike in oil prices and reviving worries about inflationary pressures and possible interest rate increases.
These rate concerns particularly impacted artificial intelligence-related equities, since elevated borrowing costs could dampen investment in AI infrastructure — a critical source of demand for Micron’s memory products.
The pressure isn’t limited to Micron. Fellow memory chipmakers Samsung Electronics and SK Hynix both experienced drops approaching 6% Wednesday, demonstrating that broader macroeconomic challenges are affecting the entire memory semiconductor industry.
Yet Wall Street remains optimistic despite recent weakness. According to FactSet data, analysts maintain an average price target for MU around $1,576 — nearly twice its current trading level.
Morgan Stanley’s Shawn Kim tackled the recent selloff in a research report this week, stating that the price correction “does not mean the cycle is over.” Kim noted that similar pullbacks have occurred three times since generative AI emerged in late 2022.
The Fundamental Picture
Micron’s core business fundamentals look solid. Quarterly revenue climbed from $23.9 billion two quarters back to $41.5 billion most recently, with projections calling for approximately $50 billion in the upcoming quarter.
Management has also communicated expectations that memory chip supply constraints will persist through 2027 and beyond — indicating multiple quarters of potential expansion lie ahead.
Analyst consensus forecasts earnings per share reaching $152.62 for fiscal 2027 and $165.94 for fiscal 2028. Applying a 25x earnings multiple to the 2028 figure suggests a potential stock price near $4,150 — representing approximately 4x upside from current levels.
That represents meaningful potential appreciation, though it’s not an astronomical return. Nevertheless, MU has already gained roughly 225% year-to-date in 2026, positioning it as the S&P 500’s second-strongest performer this year.
The Path Forward
According to Morgan Stanley’s Kim, the critical moment arrives with the next earnings season. The central question involves whether hyperscale technology companies maintain or increase their capital expenditure projections.
Should they affirm or boost spending plans, Kim indicated that current memory stock valuations would constitute a “good entry point.”
Supporting the bullish perspective: Amazon announced Wednesday its intention to issue a minimum of $25 billion in debt — suggesting that major technology companies’ enthusiasm for AI infrastructure investment remains intact.
Micron’s 52-week trading range extends from $103.38 to $1,255.00. The stock currently trades at $933.10.
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