Why did Micron stock fall so sharply if the company just posted record earnings?

While Micron delivered record $41.4 billion（約6.6兆円） in quarterly revenue and earnings of $24.67 per share (1,368% year-over-year growth), investors are concerned about the durability of the AI memory boom. A UBS survey found that 60% of businesses are curbing AI spending by shifting to cheaper models, and major companies like Walmart, Amazon, and Uber have capped employee AI usage. Additionally, competitors are building new manufacturing capacity, which will eventually increase supply and erode Micron's current pricing power.

What is HBM and why does it matter for AI?

High-bandwidth memory (HBM) stores data in a ready state for graphics processing units (GPUs) to access during AI workloads. Without sufficient HBM capacity, GPUs would pause while waiting for data, slowing down AI chatbots and other applications. Micron's new HBM4 chips provide 60% more capacity and 20% better energy efficiency than the previous generation, and Nvidia has adopted them for its new Vera Rubin GPU systems.

How large is the opportunity ahead for Micron in memory?

The data center HBM market was worth $35 billion（約5.6兆円） last year and Micron expects it to nearly triple to $100 billion（約16兆円） by 2028. Beyond data centers, Micron also supplies memory for personal computers, smartphones, autonomous vehicles (which need more than five times the memory of regular cars), and humanoid robots (which Micron says need 10 times more memory than autonomous cars).

AI Stocks & MarketsYahoo Finance AIJul 20, 2026Jul 20, 2026, 19:00 JST

Micron Stock Plunges 30% Despite AI Boom—Should You Buy?

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3 Key Points

What happened
Micron Technology stock fell 30% from its peak of $1,213 last month to close at $848 on Friday, July 17, even as the company reported record revenue of $41.4 billion（約6.6兆円） in its fiscal 2026 third quarter—a 346% year-over-year increase—driven by demand for its high-bandwidth memory (HBM) chips used in AI data centers.
Why it matters
While Micron's HBM4 chips (which offer 60% more capacity and 20% better energy efficiency than its previous generation) are critical to AI infrastructure and the data center HBM market is projected to nearly triple from $35 billion（約5.6兆円） last year to $100 billion（約16兆円） by 2028, businesses are curbing AI spending: a UBS survey found 60% of companies are routing tasks to cheaper models, and major firms like Walmart, Amazon, and Uber have capped employee AI usage to control costs. This demand uncertainty conflicts with the supply surge as competitors build manufacturing capacity.
What to watch
Micron's forward price-to-earnings ratio is just 5.6 based on Wall Street's fiscal 2027 estimate—substantially cheaper than the Nasdaq-100's 33.4—suggesting investors doubt the memory boom's durability; the company expects its Q4 (ending late August) to deliver $50 billion（約8兆円） in revenue and $30.73 per share in earnings.

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Context & Analysis

Micron's stock collapse from $1,213 to $848 masks a paradox: the company's fundamentals appear to support growth, yet the market is pricing in significant skepticism about the AI boom's staying power. The core tension stems from a mismatch between near-term supply and demand dynamics. On one side, Micron's HBM chips are essential infrastructure for AI inference and training, and the company's fiscal 2026 Q3 results—$41.4 billion（約6.6兆円） in revenue, up 346% year-over-year—demonstrate explosive near-term demand. Its forward price-to-earnings ratio of just 5.6 is far below the Nasdaq-100's 33.4, suggesting the market has priced in a sharp pullback.

On the other side, multiple headwinds are emerging. A UBS survey indicating that 60% of businesses are curbing AI spending, combined with public statements from Uber's chief operating officer and confirmed spending caps at Walmart, Amazon, and Uber, signal that customers are retreating from aggressive AI deployment. Simultaneously, Micron and its competitors are ramping capacity to meet current demand, which will inevitably increase supply. Once supply normalizes, the company will lose its pricing power—a critical driver of its current profit margins. The body suggests that Micron's long-term upside depends on "physical AI segments such as autonomous vehicles and robotics" reaching commercial scale, a timeline that extends well beyond the near-term volatility the stock is likely to face as memory supply rises and demand clarifies.

FAQ

Why did Micron stock fall so sharply if the company just posted record earnings?: While Micron delivered record $41.4 billion（約6.6兆円） in quarterly revenue and earnings of $24.67 per share (1,368% year-over-year growth), investors are concerned about the durability of the AI memory boom. A UBS survey found that 60% of businesses are curbing AI spending by shifting to cheaper models, and major companies like Walmart, Amazon, and Uber have capped employee AI usage. Additionally, competitors are building new manufacturing capacity, which will eventually increase supply and erode Micron's current pricing power.
What is HBM and why does it matter for AI?: High-bandwidth memory (HBM) stores data in a ready state for graphics processing units (GPUs) to access during AI workloads. Without sufficient HBM capacity, GPUs would pause while waiting for data, slowing down AI chatbots and other applications. Micron's new HBM4 chips provide 60% more capacity and 20% better energy efficiency than the previous generation, and Nvidia has adopted them for its new Vera Rubin GPU systems.
How large is the opportunity ahead for Micron in memory?: The data center HBM market was worth $35 billion（約5.6兆円） last year and Micron expects it to nearly triple to $100 billion（約16兆円） by 2028. Beyond data centers, Micron also supplies memory for personal computers, smartphones, autonomous vehicles (which need more than five times the memory of regular cars), and humanoid robots (which Micron says need 10 times more memory than autonomous cars).

Yahoo Finance AIRead Original Article

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