Micron Technology (MU) trades near $1,030 per share, down 18 percent from its June 25 peak of $1,255. The memory chipmaker has historically endured severe drawdowns—73 percent from 2014 to 2016, 55 percent in 2018, 43 percent in 2020, 51 percent in 2021, and 36 percent in 2024. By that precedent, the current decline could deepen.
Don't count on it. The generative AI boom has rewritten Micron's cycle dynamics in ways that break the old playbook.
Micron manufactures DRAM and NAND flash memory for PCs, servers, mobile devices, and vehicles. Memory has always operated in boom-bust swings tied to demand fluctuations. But since 2024, AI has created a new demand driver: high-bandwidth memory (HBM) chips that pair directly with Nvidia's (NVDA) data center GPUs in AI clusters, plus NAND-powered enterprise SSDs for data storage.
HBM production requires three times the wafer capacity of standard DRAM. As Micron scaled HBM output, it constrained DRAM supply for traditional end markets—a problem Samsung and SK Hynix face too. The supply shortfall pushed memory prices higher across the board, extending the current growth cycle in a way previous downturns never saw.
Analysts project Micron's revenue will grow 55 percent annually from fiscal 2026 (ended September) through fiscal 2028, with earnings per share climbing 67 percent over the same span. At six times this year's earnings estimates, the stock looks cheap against those catalysts.
The historical cycle breaks here. Micron's current valuation reflects old assumptions. Until memory supply catches up to AI-driven demand—a lag that could stretch years—the stock has room to run.
