Shares of Micron Technology Inc. (MU) dropped roughly 5% by late morning in U.S. trading on Friday, paring some of the year's strong gains as investors locked in profits and weighed the potential impact of a labor strike at rival Samsung Electronics. The stock fell to $735.74, trimming the company's market capitalization to around $838 billion.
The decline came as South Korea's Samsung Electronics faces a planned 18-day strike by its main labor union, set to begin May 21. The walkout threatens to disrupt global memory-chip supplies at a time when demand for high-bandwidth memory (HBM) and other AI-related chips is surging. Samsung shares dropped as much as 9.3% on the news, with analysts flagging heightened supply and delivery risks.
Despite the near-term uncertainty, Bank of America's Vivek Arya raised his price target on Micron to $950 from $500 this week, maintaining a Buy rating. The upgrade reflects expectations that AI-driven demand will keep memory supplies tight, benefiting Micron and other memory makers. Arya cited strong demand for DRAM and NAND memory, as well as HBM, a premium product that delivers data at speed to AI processors.
Micron's revenue has surged on the AI boom. The company reported $23.86 billion in revenue for its fiscal second quarter, a sharp rise from $8.05 billion a year earlier, and guided for $33.5 billion in the third quarter. CEO Sanjay Mehrotra has called memory a "strategic asset" for customers investing in AI infrastructure.
A prolonged strike at Samsung could send more business—and potentially higher prices—to competitors like Micron and SK Hynix. However, if labor talks resolve quickly, the supply-risk premium could dissipate. Analysts at NH Investment & Securities noted that the situation could open a door for rivals to grab market share.
Investors are also watching the broader semiconductor rally. U.S. technology funds attracted a record $8.51 billion in the week ending May 13, according to LSEG Lipper data. But some market participants caution that the rally may be overextended. Shares of both Micron and AMD have more than doubled since March.
The key variables for Micron remain cloud spending on AI hardware and the Samsung strike outcome. The former underpins the bull case; the latter could provide a near-term jolt. For now, investors are recalibrating their positions as the May 21 strike deadline approaches.
