Micron’s Record Quarter Meets a 32% Rout — A Chinese Rival and AI Doubts Are Pummeling the Stock
Published on 07/19/2026 at 14:04 | Redaktion boerse-global.de
A yawning gap has opened between Micron’s operational performance and its share price. The US memory giant just delivered the strongest quarter in its history — $41.46 billion in revenue, earnings per share of $25.11, and a gross margin heading toward 86% — yet the stock has shed roughly 32% since touching an all-time high of 1,103.80 euros on June 25. At Friday’s close of 746.30 euros, the equity has lost 17.74% over the past 30 days and nearly 13% in the last week alone.
The forces driving the disconnect are threefold: a looming Chinese competitor, a disillusioning open-source AI model, and a broad rotation out of semiconductor names that has turned one of 2026’s hottest trades into a bear market. The Philadelphia Semiconductor Index has tumbled about 20% from its June 22 record high, with July alone wiping out more than 18%.
A triple threat lands on a sector already on edge
The most concrete catalyst came from Beijing. Reports that Chinese memory maker CXMT is planning an initial public offering worth up to $8.55 billion hit the tape near the end of June, injecting a fresh supply-side fear into a market that had long priced in pricing power for incumbents. Equally unsettling was news that cloud provider CoreWeave is exploring financial hedges against falling memory prices — a signal from a key customer that the current pricing peak may not be permanent.
Should investors sell immediately? Or is it worth buying Micron?
But the event that tipped the sector into a proper rout was the unveiling of Kimi K3, an open-source AI model with 2.8 trillion parameters from Chinese startup Moonshot. The announcement rekindled debate about whether the billions of dollars US hyperscalers are pouring into AI infrastructure are justified, and it hit at the worst possible moment for memory stocks already priced for perfection. Samsung and SK Hynix, Micron’s two main rivals, have each lost more than 20% from their recent closing highs.
Record numbers that should have been a floor
Micron’s third fiscal quarter, reported earlier this year, was nothing short of stunning. Revenue surged 346% year-over-year, driven by DRAM contract prices that rose an estimated 93–98% quarter-over-quarter in Q1 2026. The average selling price for DRAM chips now sits at roughly $1.17, the highest level in a decade and well above the prior cyclical peak of $0.87 reached in 2018–2019. Samsung reported a similar jump of over 90%, while SK Hynix registered a mid-60s percentage increase.
The company’s fourth-quarter guidance calls for revenue around $50 billion, a gross margin of roughly 86%, and adjusted EPS of $31.00. HBM4 shipments for Nvidia’s Vera-Rubin platform began in March and are ramping at double the speed of the preceding HBM3E generation. Micron has locked in approximately $22 billion in take-or-pay agreements across 16 long-term contracts, and its HBM capacity is sold out through the end of 2026. Chief executive Sanjay Mehrotra told analysts he expects supply constraints to extend well beyond 2026 and even into 2027, estimating that Micron can serve only half to two-thirds of its largest customers’ demand.
Bullish Wall Street targets meet a cheap multiple
Despite the slide, analysts remain overwhelmingly positive. TD Cowen set a price target of $1,500, implying roughly 47% upside from current levels. A broader panel of 45 houses assigns a consensus target of $1,486, with the majority at a strong-buy rating. The average target in euro terms — $1,298.92 — suggests potential gains of about 74%. The stock’s price-to-earnings multiple has fallen below seven, making Micron one of the cheapest names in the Nasdaq 100.
Yet the gap between those price targets and the market’s actual mood is unusually wide. Some voices are cautioning that the AI memory boom may prove cyclical rather than structural. Investment firms associated with the John Templeton family have pointed to the 2018 precedent, when Micron’s P/E dipped to 4.5 before the stock subsequently collapsed 57%. The historical comparison is uncomfortable: after the 2018 peak, average DRAM prices dropped more than 55%, and the stock followed suit through 2019.
This time, the mechanics are different
Micron at a turning point? This analysis reveals what investors need to know now.
The 2026 selloff has a different anatomy from 2018’s. Seven years ago, Chinese authorities sought to cap pricing power via a cartel investigation. Today, the challenge comes from actual competition — a CXMT-funded expansion that aims to undercut incumbents on price rather than through regulation. Long-term supply agreements stretching to at least 2027 give Micron greater revenue visibility than in prior cycles. The company has also locked in roughly 40% of its revenue through contracts with price floors, a buffer that didn’t exist a decade ago.
Chart watchers are eyeing the 100-day moving average near 605.09 euros as a critical support level — so far it has held. The stock remains 75.58% above its 200-day average of 425.05 euros, a stark reminder of how explosive the preceding rally was.
The next test comes this week
All eyes now turn to SK Hynix, which reports results in the coming days. Its numbers will provide the first major check on whether the DRAM and HBM pricing environment is holding or starting to fray. Beyond earnings, the market will be parsing capital expenditure signals from the big US technology companies, which will either validate or undermine the investment thesis that has driven Micron to these heights. For a stock trading at a single-digit P/E with record revenue and a fully booked factory floor, the risk is not in the fundamentals — it is in whether the market’s mood can refocus on them.
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Micron Stock: New Analysis - 19 July
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