Micron Stock Drops 22% Despite Record AI-Driven Profits

Shares of Micron Technology have fallen 22% from their June 24 peak, despite the company reporting record-breaking profits and a bullish outlook. The stock previously surpassed a $1 trillion market capitalization on May 26 and saw a 250% increase year-to-date, but it is now trading below pre-earnings levels due to high valuation expectations and a crowded trade.

The decline follows reports that Meta may limit its data center expansion and that Apple Inc. might seek banned Chinese memory chips to reduce costs. However, the AI infrastructure boom continues to drive growth, with data center DRAM and NAND bit shipments in 2026 doubling compared to two years ago. The company reported a record gross margin of 84.9% and a net margin of 41.5%.

To counter historical industry boom-and-bust cycles, Micron implemented Strategic Customer Agreements covering 20% of DRAM and one-third of NAND volume. While these provide stability, they include ceiling prices that may limit future earnings if market prices rise. Analysts at Citi maintain that current weakness is a buying opportunity, citing continued demand from hyperscalers like Amazon and the AI capital expenditures boom.