Micron’s 12% Selloff: The Broadcom Effect Meets a 712% Rally – What Traders Are Watching Next

Micron shares plunged 12.16% after Broadcom's forward guidance disappointed markets. Despite the drop, technicals remain bullish and HBM4 memory output for Nvidia is fully contracted for 2026.

The tech rally that has lifted Micron Technology to stunning heights hit a sudden speed bump on Friday, but the damage may be more about sector-wide contagion than anything fundamentally broken in the memory-chip maker’s story. Shares tumbled 12.16% to €755.00, snapping a run that had seen the stock gain 180.67% year-to-date and a breathtaking 712.53% over the past twelve months.

The trigger was not Micron itself but Broadcom, whose 15% single-day plunge after a quarterly report that disappointed on forward guidance sent shockwaves through the entire AI complex. Broadcom’s numbers were objectively strong — revenue surged 48% to $22.2 billion and net profit jumped 88% to $9.31 billion — but the market had already priced in an even bigger beat. When CEO Hock Tan merely confirmed the $100 billion AI revenue target for fiscal 2027 rather than raising it, the selloff began. It rippled instantly into peers, with Micron, Infineon, and SoftBank all taking double-digit hits.

A Technical Picture That Still Favors Bulls

Despite the severity of Friday’s drop, the long-term technical structure remains remarkably intact. The stock closed at €755.00, still 41.53% above its 50-day moving average of €533.47. The 200-day average, at €311.07, underscores just how extraordinary the preceding rally was. A retreat toward the 50-day line would not constitute a trend reversal — rather, it would be a long-overdue cooling after an extreme advance.

The Relative Strength Index settled at 56.2 after the selloff, a level that is neither overbought nor oversold. That neutrality is noteworthy: despite a sharp one-day decline, momentum did not flip into bearish territory, leaving room for a bounce without sending a strong contrarian buy signal. With annualized 30-day volatility at a staggering 101.20%, wide intraday swings are structural for Micron right now, and any single session says little about the weeks ahead.

Why the Fundamental Story Still Holds

What makes Friday’s correction feel more like a tempest in a teapot than the start of a deeper downturn is the company’s strategic positioning. Micron has already started volume production of its HBM4 memory chip, featuring 36 gigabytes across 12 layers, designed specifically for Nvidia’s Vera Rubin platform. Remarkably, the entire HBM4 output for 2026 has been locked in through multi-year contracts. A business that was once a spot-market commodity has transformed into contracted infrastructure.

That said, a potential snag is brewing. Industry reports point to quality issues with the base chip of Nvidia’s Vera Rubin platform, which could impact both Micron and rival SK Hynix. If confirmed, the production ramp might temporarily hit a slowdown. Analysts, however, remain largely bullish. UBS lifted its price target to $1,625 in late May, Morgan Stanley to $1,050 in early June, while Goldman Sachs stands apart with a more cautious $400 call, warning of memory’s cyclical nature. The consensus of 44 analysts is a “Strong Buy” with an average price target of $739.48.

Two Key Levels to Watch This Week

With the stock now sitting at €755.00, the all-time high of €938.70, set on June 3, serves as the critical resistance to the upside — a 19.57% climb from current levels. On the downside, the €755.00 zone itself is the first stability test. If it holds, the decline can be classified as a controlled pullback. A break below that level would shift focus toward the next consensus target of around €641.72.

Macro catalysts are also on the calendar. US consumer and producer price inflation data due this week could sway interest rate expectations and, by extension, valuations for growth names like Micron. But the real event is Micron’s own fiscal third-quarter earnings report on June 24. That is when investors will learn whether the AI-driven demand for memory products justifies the aggressive rerating that has propelled the stock over the past year. For fiscal 2026, analysts project a profit of $58.79 per share — a 665% leap from current levels — setting an extraordinarily high bar for the company to clear.