Key Takeaways
- Micron stock fell 10.9% in the past month through Monday’s close, all of it after Oct. 7, as chip stocks sold off on fears about China’s memory makers and about AI spending.
- The selloff looks like a buying opportunity, because Micron’s business and its earnings estimates kept climbing through it.
- Micron guided to $61.5 billion of revenue for its fiscal first quarter, after a fiscal fourth quarter with an 86.8% gross margin.
- The stock trades at about 5x fiscal 2027 earnings estimates, and the risk to watch is China’s CXMT ramping up competitive memory by 2028.
Micron Technology (MU) stock is down 10.9% in the past month (through Monday’s close), while the Nasdaq 100 slipped just 0.4%. Fellow memory maker SK hynix (SKHY) fell even harder, down 23.8%.
That’s quite a reversal for a stock still up 217% in 2026 after a record quarter on Sept. 30. And all of the damage came after Oct. 7.
What exactly happened
Micron fell 4.8% on Oct. 8, when its only news was a strike vote by its Taiwan workers.
Then over the weekend, China’s CXMT said it had made progress on a denser DRAM design and aims to launch server memory using it by the end of 2026. Micron dropped 3.9% on Oct. 12 and about 4% more the next day, while SK hynix sank 10.1% in Seoul.
A hotter-than-expected September CPI print knocked the Philadelphia Semiconductor Index down 4.3% on Oct. 14, and Micron fell 4.1%. Then on Friday, Oct. 16, Micron’s worst day (-5.6%), worries about how all that AI spending gets financed hit chip stocks across the board.
Micron bounced about 3% on Monday with other chip stocks, with no news of its own.
China is going after Micron’s best margins
Midday Friday, Elon Musk put a timeline on the China fear in a reply on X:
“For sure in 2027, but if China ramps LP5 & LP6 as fast as they’ve ramped other manufactured products, then 2028 will be a different story. HBM is a tougher hill to climb, however.”
That’s the right worry, because memory has never been more profitable for Micron. Its gross margin went from 2.7% in fiscal 2023 to 39.8% in fiscal 2025…
…then hit 80.7% in fiscal 2026, and 86.8% in the fourth quarter alone. Margins like that last only while memory stays scarce. (Fiscal 2023 shows what happens when it doesn’t.)
For now, it’s scarce. Bloomberg Intelligence’s Vasu Kasibhotla said on Oct. 15 that the memory makers “all sold out capacity in 27 and probably a lot of 28 as well.”
Micron’s own numbers keep climbing
None of this has hurt the business. Fiscal fourth-quarter revenue was $54.23 billion, nearly five times the year before, with $33.20 billion of adjusted free cash flow. Micron guided the current quarter to $61.5 billion of revenue, and CEO Sanjay Mehrotra said “we expect an even stronger fiscal 2027.”
Analysts keep raising their numbers…
Fiscal 2027 consensus is up to $176.55 a share, from $156.52 in mid-September. A rival’s design announcement doesn’t change memory that’s already sold.
Micron also raised its buyback authorization to $35.16 billion, starting Dec. 9, after a stretch when its buyback looked tiny next to its cash pile, now $73.48 billion.
What’s next: a webinar, then December
Micron hosts a technology webinar on Wednesday, Oct. 21, at 8 a.m. Mountain Time. Fiscal first-quarter results should follow in mid-December. The near-term wildcard is Taiwan, where Micron’s workers authorized a strike in a bonus dispute and want 15% of operating profit.
Load up, with one eye on 2028
At Monday’s close, Micron traded at about 5x the earnings analysts expect for fiscal 2027. That’s a multiple for profits about to shrink, and the estimates have them growing through fiscal 2028.
Bank of America’s Vivek Arya reiterated his Buy rating and $1,550 target on Oct. 15, 71% above Monday’s close. Even that target asks for a bit under 9x the earnings analysts expect over the next 12 months.
My take: I’d load up. The price already assumes margins will peak, and Micron’s 2027 supply is largely spoken for.
The risk is CXMT shipping competitive server memory on schedule and ramping up from there, which is exactly the 2028 story Musk described. December’s report is the first test, against that $61.5 billion guide.
So what is Micron stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
