Micron's AI Chip Boom: Why Investors Are Still Optimistic Despite Stock Drop

Stock Performance

• Recent Drop: Over 6% drop to close at €205
• Price Targets: Big banks set targets as high as $330

Key Drivers

• HBM Chips Sold Out: All high-bandwidth memory (HBM) chips for AI use booked through 2026
• Strong Demand: Huge demand for next-gen HBM3E and HBM4 memory chips

Industry Context

• Semiconductor Struggles: Rough week for the industry, with companies like Western Digital seeing losses
• AI Stock Valuations: Concerns over high valuations and data center order delays

Analyst Sentiment

• Rating: "Strong Buy"
• Production Capacity: All production capacity for advanced chips booked through 2026

Investor Activity

• Big Investors: Adage Capital Partners increased stake by 1.1%, now owning over 1.18 million shares ($146 million investment)
• Insider Sales: CEO and Executive Vice President sold shares totaling $83 million

Company Changes

• Consumer Brand: Plans to stop "Crucial" brand by February 2026
• Focus Shift: Moving towards more profitable enterprise and AI memory solutions
• Price Surge: DRAM and NAND flash memory prices jumped 80% to 100% in December

Upcoming Earnings

• Release Date: December 17
• Expectations:
• Earnings per share up 114% year-over-year
• Revenue projected to rise 44%
• Potential Confirmation: HBM production sold out for 2026

Technical Indicators

• RSI: 45 (indicating volatility)
• 50-day Moving Average: €196 (potential support level)