Micron Technology (MU) shares tumbled 8.3% to $989.46 in Thursday trading on the Nasdaq, joining a broad selloff in semiconductor stocks that dragged the iShares Semiconductor ETF (SOXX) down 5.0% and the Invesco QQQ Trust (QQQ) off 1.3%. The decline came after Broadcom (AVGO) reported disappointing quarterly results, prompting profit-taking across the sector following recent highs.
Despite the sharp drop, Micron's market capitalization remained near $1.13 trillion, underscoring the immense gains the AI memory rally has delivered before buyers stepped back. The stock has surged roughly fourfold this year, even as it trades above some analysts' price targets.
The selloff was led by Broadcom, which plunged 15.5% after its second-quarter revenue missed forecasts and its outlook for current-quarter AI chip sales fell just short of Wall Street expectations. Advanced Micro Devices (AMD) dropped 6.6%, while memory maker SanDisk (WDC) slipped 2.6%. “A classic case of very high expectations meeting a market that wanted perfection,” said Matt Britzman, senior equity analyst at Hargreaves Lansdown.
Wall Street analysts remain bullish on Micron, citing an ongoing memory chip shortage that could last years. Morgan Stanley’s Joseph Moore raised his price target on the stock to $1,050 from $520, stating that “there’s no quick fix to the memory shortage” and that tight supply could persist for two to three years or more. “We don’t think the run of strong performance is over,” Moore said in a note.
Memory chips are critical components in AI servers. High-bandwidth memory (HBM) sits near AI processors, providing fast data speeds. DRAM serves as working memory for servers and computers, while NAND flash handles data storage in phones, SSDs, and other devices. The shortage of these chips is straining supply chains.
U.S. industry groups representing automakers, retailers, electronics, and telecom companies have warned the Treasury and Commerce Departments that AI data centers are consuming a large portion of available memory chip supply. They cautioned that this could push up prices and disrupt supplies of consumer and industrial products.
However, there are risks that memory pricing may peak sooner than expected. Raymond James analyst Karl Ackerman maintained an Outperform rating but warned that “DRAM and NAND average selling prices will peak in mid-CY26.” He flagged that increased output from Chinese suppliers and slower demand, especially in smartphones, could drag prices down later.
Memory markets are cyclical. When supply meets demand, prices tend to fall quickly, squeezing margins and diminishing investor interest. Micron is scheduled to report fiscal third-quarter results after the bell on June 24, with a financial call at 4:30 p.m. EDT and an analyst call at 6 p.m. EDT.
Thursday’s drop does not negate the AI memory narrative, but it signals that with a $1 trillion market cap, investors now expect a cleaner run. Misses, even near misses, stand out more sharply at these levels.
