U.S. stock markets closed Friday for the Independence Day holiday, leaving Micron Technology (NASDAQ:MU) with a sharp two-session decline heading into the break. The memory chip maker's shares dropped from $1,154.29 on June 30 to $975.56 at the July 2 close, a 15.5% plunge that erased roughly $202 billion in market capitalization based on 1.13 billion shares outstanding.
The selloff accelerated on July 1 and July 2, with Micron falling 10.57% and 5.49% respectively. Trading volume surged to 61.84 million shares on July 2, running 119% above the 65-day average. The stock now sits 22.3% below its 52-week high of $1,255.00.
Market Context and Broader Selloff
The PHLX Semiconductor Index dropped 5.4% on Thursday, marking its second steep daily decline, while the Nasdaq Composite fell 0.80% to 25,832.67. Chip stocks broadly slumped, with Micron underperforming the benchmarks. The two-session moves saw the PHLX index lose 11.4% and the Nasdaq slip 1.5% from June 30 levels.
Freedom Capital Markets analyst Paul Meeks noted that the AI infrastructure trade lost momentum last week. "The bloom came off the rose last week for the AI infrastructure trade," Meeks told Barron's.
Bullish and Bearish Views
Despite the rout, some analysts remain optimistic. Mizuho Securities kept Micron on its July top picks list, with analyst Vijay Rakesh maintaining an Outperform rating and a $1,375 price target, implying 41% upside from Thursday's close. "We see MU and other key memory suppliers all seeing strong near-term tailwinds, driven mostly by AI demand," Rakesh said in a note reported by Barron's.
However, bears gained ammunition as MarketWatch reported that investor Michael Burry placed a short bet against Micron, as detailed in a Substack post. Burry reportedly intensified his negative stance on the AI trade by targeting one of the key memory stocks.
Financial Fundamentals
The $202 billion market cap loss dwarfs Micron's recent financial metrics. It represents about four times the company's fiscal Q4 revenue guidance midpoint of $50.0 billion (plus or minus $1.0 billion), and roughly 11 times the fiscal Q3 adjusted free cash flow of $18.3 billion. The loss also equates to about 6.7 times Micron's cash, marketable investments, and restricted cash of $30.2 billion.
Micron's fiscal third-quarter results showed robust growth. Revenue reached $41.46 billion, up from $23.86 billion in the prior quarter and $9.30 billion a year earlier. Non-GAAP EPS came in at $25.11. CEO Sanjay Mehrotra stated, "Micron is investing at record levels in technology, products and supply to address our customers' rapidly growing demand."
Segment Performance
Revenue by business unit for fiscal Q3: Cloud Memory generated $13.77 billion, Core Data Center $11.52 billion, Mobile and Client $11.52 billion, and Automotive and Embedded $4.63 billion. All segments showed significant sequential and year-over-year growth.
Micron's quarterly dividend of $0.15 per share will be paid on July 21 to shareholders of record as of July 6, the next regular trading day.
As markets reopen Monday, investors face a key question: whether last week's decline represents a buying opportunity or the beginning of a broader retreat from AI-related chip stocks.
