Micron Hits $818 All-Time High Then Pulls Back — What Comes Next

A record high was reached by Micron Technology (NASDAQ: MU) at $818.67. However, the stock dropped 11% over the next three sessions and ended the day close to $724. A year ago, the stock was trading at a 52-week low of $90.93. It has since gone up by almost seven times that amount. The recent drop could be normal profit-taking after a huge run, or it could be the first sign that the market has gone too far ahead of factors that the company admits it can't fully model yet.

There have never been more different sides to the valuation argument. This week, Deutsche Bank and DA Davidson both set price goals of $1,000. Bank of America raised its goal to $950 after estimating that the 2030 AI data center TAM would be around $1.7 trillion. The average price on Wall Street is currently around $584. The TIKR mid-case model predicts a loss of $539 and a total gain of zero. What really needs to be done is in that gap.

How Micron Got Here — and What the Q2 Call Actually Said

The move hasn't been straight. Micron's stock went up after its March earnings, then fell 3.78% when its Q2 results came out, even though sales of $23.86 billion were almost three times what they were the previous year, and then dropped to a 30.31% at its lowest point by March 30 after a Google Research compression algorithm shook the AI memory trade. It then more than doubled from that trough into mid-May.

The important change in the story came from Micron's management. On the March 19 call after the company's earnings, Chief Business Officer Sumit Sadana told traders that the company is "not even close to meeting" the demand for its Gen6 SSD.

When asked about HBM pricing, he confirmed that contracts signed in late 2025 for calendar 2026 had "robust ROI and profitability," and that upward amounts sold since then have reached "even more robust levels." The 2026 HBM has been sold out everywhere. There are already HBM4 units from Micron for Nvidia's Vera Rubin platform.

The news cycle after earnings was mostly about the headline number for sales and the guidance for the Q3 gross margin of about 81%. The analyst call had more important information. CEO of International Business According to Manish Bhatia, HBM4 is showing "an even faster yield ramp than HBM3E 12-high." A higher yield means a lower cost per bit and a floor under margins, even if prices finally return to normal.

CFO Mark Murphy confirmed that Micron's Idaho and Tongluo facilities will not create enough supply to make a real difference in revenue until fiscal year 2028. Starting in Q3 FY2026, start-up costs will add an extra $100 million to $200 million per quarter. The capital expenditure plan for fiscal year 2026 went up from $20 billion to over $25 billion.

The company's leaders expect it to make $33.5 billion this fiscal quarter, which is 260% more than the same time last year, and $18.90 per share, up from $12.07 per share in the previous quarter. The next report on profit should come out around June 24.

The 256GB DDR5 Product Milestone That Landed Mid-Pullback

Micron sent samples of a 256GB DDR5 RDIMM module made on its 1-gamma process technology to key server ecosystem partners, even though trading was unstable in the short run. The module can handle up to 9,200 megatransfers per second, which is more than 40% faster than current production modules. Also, using just one unit instead of two smaller ones saves more than 40% on power.

For AI data center managers who are already struggling with limited power, that energy efficiency gain is not a small one; it is a basic improvement in the total cost of ownership.

A lot of work is being done to make sure that the platform works with both new and old server generations. The goal is to make it possible for hyperscale deployment in AI and HPC systems.

Three Catalysts Converging This Week

Three events this week will put the Micron theory to the test for real. The most important outside event is Nvidia's quarterly earnings report on May 20. Any comments about memory needs, the future of HBM demand, and hyperscalers' capital expenditure plans will quickly affect Micron's mood.

Two events happen at the same time on May 21: the 45,000-worker Samsung strike at the world's biggest memory maker starts, and Micron gives a talk at the J.P. Morgan technology conference. A long-term stop in production by Samsung would make the already limited supply of memory even tighter, which would be good for Micron's price.

Rising 10-year Treasury yields above 4.6% are a macro headwind that has generally hurt technology stocks with high multiples.

The Supply Constraint Timeline — and the 2028 Risk

One thing supports the structural bull case: Micron doesn't think its big growth sites will add much more supply until late 2027 or early 2028.

The company thinks that AI demand will make up more than half of the whole market for DRAM and NAND this year. Micron's story went from being a cyclical commodity maker to a strategic AI infrastructure bottleneck because of the lack of DRAM and HBM at the same time. This is happening at the same time that AI demand is growing faster than new capacity can be built.

The bear case is the standard memory cycle playbook with a 2028 time stamp: multiple manufacturers bringing online new greenfield DRAM capacity at the same time, which could cause a demand air pocket.

Murphy talked about this risk in the Q2 call, saying that capital spending "could go down after '27, but we're not making that call." Before anyone can be sure that demand will stay high during the supply ramp, a capex promise of $25 billion or more is made for FY2026-26.

The most important thing is what Sadana said: Micron does not yet have a "high confidence view" on when supply will catch up to demand. This is why the stock price went from $90 a year ago to $818 this month.

Micron trades at 5.94x NTM EV/EBITDA, while SK Hynix trades at 3.80x. The difference is due to Micron's U.S. home and Wall Street's belief that this cycle is structural.

The most important short-term data point is the June 24 Q3 gross profit. About 81% was led by management. At that level or higher, HBM's pricing power is still there, and short-term cost pressures are being dealt with. The difference between the TIKR model and the actual stock price gets much harder to defend when it drops below 80%.

The stock is now about 9% below its all-time high, and the RSI was recently at 77. This suggests that the longer-term trend will stay in place even as the overbought condition is fixed. Micron would pass the $1 trillion mark if its market value went up another 10% from its current level of about $900 billion. If the gross margin forecast holds, the earnings in June will show if that move was worth it.