Micron Technology closed at $823 per share on Friday, July 31, down 5.90% on the day and 39% below its year high. The drop came as investors digested massive spending plans from rivals SK Hynix and Samsung, who together aim to invest up to $1.3 trillion in new chip capacity. The sell-off hit the broader memory sector: SK Hynix stock fell 13% on capex concerns, and SanDisk has plunged 41% in the past month.
Why the shortage isn't ending soon
Demand for high bandwidth memory (HBM) used in AI accelerators has outpaced supply for more than a year. Micron's management does not expect the shortage to ease before 2028. That long timeline is a double-edged sword: it supports pricing power for now, but it also means the industry is racing to build factories that may not come online for years. SK Hynix and Samsung's combined $1.3 trillion bet underscores how urgently they need to close the gap.
Mixed signals for Micron
Wall Street analysts still rate Micron stock a strong buy, but short-term technical indicators point toward a sell signal. The company trades at a forward price-to-earnings ratio near 19.8, with a market capitalization of about $930 billion. One analysis models Micron reaching roughly $1,000 per share by mid-2028 if pricing power holds. Another warns that rising AI infrastructure costs could force hyperscalers to slow spending before Micron's new capacity comes online.
SanDisk's wild ride and CXMT's quiet climb
SanDisk holds a year-to-date gain of about 362% despite its recent crash, reflecting how volatile the memory market has become. Meanwhile, Chinese chipmaker CXMT's stock has kept climbing since its IPO, a sign that investors are still hungry for memory plays even as the sector's giants stumble. Samsung posted a 1,800% profit jump last quarter, but its stock hasn't escaped the sector's broader pressure.
Micron's next earnings report is due September 29. That date will give the market its first hard look at whether the company's pricing power is holding up against the wave of new capacity announcements.
