Key Takeaways
- Micron shares fell 6% today as Democrats won control of Congress.
- Investors priced in a slower AI build-out, which Jim Cramer said would let memory inventories build up, a win for Apple.
- Micron’s gross margin hit 86.8% last quarter on rising memory prices, which leaves it exposed if they cool.
- With most of its 2027 output committed, the selloff looks overdone ahead of Micron’s December report.
Micron Technology (MU) fell 6% today, even as the S&P 500 rose 2% after Democrats won control of both the House and the Senate in Tuesday’s midterms.
Investors read a Democratic Congress as a brake on the AI build-out, with newly elected officials and ballot measures that could restrict data center construction. So they sold the build-out’s contractors and suppliers and bought Apple (AAPL), up 6% to a record high.
Jim Cramer, host of CNBC’s Mad Money, explained why on X: “Apple winner… slowdown in build means inventories can build of DRAMs”
A slower build would let memory buyers restock and cool the prices challenging Apple, whose margin outlook disappointed investors after its results on Monday. Micron sits on the other side of that trade.
Record backlogs didn’t help
Contractor Quanta Services (PWR) fell 12%, yet its third-quarter release on Oct. 29 showed a record $63.7 billion backlog and a higher 2026 outlook across every metric. New awards could slow, though, if newly elected officials make data centers harder to build.
Comfort Systems USA (FIX) fell harder with no news of its own, and a drop at Coherent (COHR) shows investors sold data-center networking names, too.
TIKR tracks 49 analysts on Micron. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Micron, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Micron’s Analyst Ratings
Micron has the most riding on memory prices
Analysts expect Micron’s normalized EPS to more than double, from $75.52 in fiscal 2026 to $176.50 in fiscal 2027, then reach $207.76 in fiscal 2028:
Those estimates depend on memory staying expensive. Micron’s gross margin has risen in each of the last six quarters, to 86.8% in the quarter to Sept. 3:
The market already prices that as a peak: Micron traded at 4.7x forward earnings at Tuesday’s close, even lower after today’s drop, about where it sat near the top of the last memory cycle in 2017 and 2018.
Overdone, for now
Micron has a cushion. Management said on its Sept. 30 call that over 75% of its 2027 output is committed, and Micron can start buying back up to $35.16 billion of stock on Dec. 9.
The way I see it, investors are selling a slowdown that hasn’t shown up in the numbers yet. Of course, if data center construction really does stall, memory prices will fall with it. Micron guided to an 86.25% adjusted gross margin for its fiscal first quarter, which it reports on Dec. 16.
So what is Micron stock actually worth?
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