Micron Technology (MU) shares tumbled approximately 13% on Friday, closing at $864.01, as part of a broader semiconductor rout that erased roughly $1.3 trillion in market value from U.S. chip stocks. The selloff, which wiped out about $150 billion in Micron's market capitalization, came despite the memory-chip maker reporting record revenue and receiving a key qualification from Nvidia (NVDA) for its next-generation high-bandwidth memory (HBM4) chips.
The decline highlights growing investor impatience with even strong earnings in the artificial intelligence sector, as expectations have risen to extreme levels. Micron's stock, now considered a high-beta play on AI memory demand, was caught in a wave of profit-taking that swept through technology and semiconductor names. The PHLX Semiconductor Index plunged 10.3%, its worst single-day drop since March 2020, while the Nasdaq Composite fell 4.18% and the S&P 500 declined 2.64%.
Market participants attributed the selloff to a combination of factors, including a hotter-than-expected U.S. jobs report that fueled bets the Federal Reserve may maintain higher interest rates for longer. This macroeconomic pressure, combined with already lofty valuations in the chip sector, triggered a broad pullback. “After the record run we’ve seen the last nine weeks in equities, specifically tech and semiconductors, the dam just broke today,” said Ryan Detrick, chief market strategist at Carson Group.
The negative sentiment was amplified by Broadcom’s (AVGO) quarterly results earlier in the week. The chipmaker fell short of second-quarter revenue expectations, kept its current-quarter AI chip revenue target at $16 billion—below the $16.36 billion analysts had forecast—and maintained its 2027 AI sales goal at $100 billion without raising it. “Nothing slows down what was estimated prior—they just didn’t raise it,” said Ben Bajarin, CEO of Creative Strategies. Direxion’s Ryan Lee noted that the miss “showed the market demands perfection for this chip rally to keep running.”
Even positive news for Micron failed to stem the losses. Nvidia CEO Jensen Huang confirmed that Samsung Electronics (SSNLF), SK Hynix, and Micron had all passed qualification to supply HBM4 chips for Nvidia’s Vera Rubin AI platform. “All three vendors are in production, and they are all racing to support Vera Rubin,” Huang said, adding that memory remains tight—typically a favorable condition for suppliers. While the qualification keeps Micron in the leading group for next-generation AI memory, analysts noted that investors are now focusing on market share, production timing, and pricing rather than just the qualification itself.
Micron’s fundamentals remain strong. The company reported fiscal second-quarter revenue of $23.86 billion, up sharply from $13.64 billion in the prior quarter and $8.05 billion a year earlier. Guidance for fiscal third-quarter revenue stands at $33.5 billion, plus or minus $750 million. CEO Sanjay Mehrotra highlighted record revenue, gross margin, earnings per share, and free cash flow, stating that “memory has become a strategic asset” in the AI era.
Despite these metrics, the market is now punishing stocks that deliver “good but not better” news. If AI demand continues to outpace supply, Micron’s margins may hold and the selloff could stabilize. However, if the company merely matches forecasts again, if HBM pricing softens, or if rate hike expectations rise, further downside is possible. Ohsung Kwon, chief equity strategist at Wells Fargo, described the sector as “way overbought” but added that he does not believe the chip rally is over.
Micron’s next major catalyst is its fiscal third-quarter earnings report, scheduled for release on June 24 after the market close at 4:30 p.m. EDT, followed by an analyst conference call at 6:00 p.m. EDT. The results will provide a crucial test of whether the company can meet sky-high expectations and restore investor confidence.
