Micron's AI Memory Coup Meets a Wall of Profit-Taking: HBM Sold Out Through 2026, But Stock Tumbles 9% from High

Micron Technology fell 8% from 52-week high after AI chip order delays, but binding HBM contracts and 196% revenue surge highlight a transformed company with forward P/E below 8x.

The euphoria around Micron Technology hit an abrupt wall on Friday, when the stock shed more than 8% to close at €624.00, shaving off about nine percent from a fresh 52-week high of €685.40 reached just three days earlier. The trigger was a broad semiconductor selloff sparked by news that Chinese tech companies had failed to place expected orders for advanced AI chips. Yet behind the headline volatility lies a fundamentally transformed company — one whose entire high-bandwidth memory (HBM) production for the rest of 2026 is already tied up in binding contracts.

That forward visibility is the bedrock of a jaw-dropping financial turnaround. In the second fiscal quarter, Micron posted revenue of $23.86 billion, a 196% jump from the prior year, with non-GAAP gross margins approaching 81%. For the current quarter, management guided for roughly $33.5 billion in sales — growth of around 260%. Earnings per share hit $12.07 in Q2, up 756% year over year, and the third-quarter target of $18.90 implies a staggering 1,025% leap.

The stock's year-to-date advance stands at about 132%, though the longer view is even starker: over twelve months, Micron has gained more than 630%. That rally briefly turned the memory maker into a liquidity king. During a nine-day stretch last month, Micron topped Nvidia in trading volume on six occasions, and its trailing five-day average dollar turnover of roughly $47 billion dwarfed Nvidia's $34 billion.

None of that spared the shares from a technical reckoning. The relative strength index sits at 77, well into overbought territory. Friday's heavy volume — a clear sign of institutional profit-taking — left the stock trading 50% above its 50-day moving average and a dizzying 138% above its 200-day line. Momentum traders rushed for the exits, but the structural thesis remains intact.

On the fundamental side, valuations still appear compelling when measured against profit growth. The forward price-to-earnings ratio hovers below 8x — cheap for a company with this trajectory. The consensus estimate for fiscal 2027 EPS stands at $101.78, roughly 75% above the current year's level. Analysts at Bank of America doubled their price target to $950 on May 13, while the wider Street range stretches from a bearish $150 to an optimistic $1,000.

But cautionary signals emanate from inside the company. CEO Sanjay Mehrotra sold 40,000 shares on May 1 under a pre-arranged trading plan, netting about $21.45 million at an average price of $536.26. Director Steven Gomo followed with a $1.57 million sale on May 13. In total, insider disposals over the past three months have reached $52.4 million. Such sales are routine after a massive rally, yet they inject a note of sobriety into an otherwise exuberant narrative.

The real tension lies in Micron's cyclical DNA. DRAM and NAND remain vulnerable to price swings, and the company is committing $25 billion in capital expenditure — a bet that could quickly pressure margins if demand softens. Geopolitical risk is another constant: any negative headline out of Beijing can trigger sharp intraday moves, as Friday demonstrated. Yet the long-term driver — AI data centers consuming ever more high-bandwidth memory — appears unshaken. The next concrete checkpoint comes in June, when Micron reports third-quarter results. If it hits that $33.5 billion sales target, last week's correction may be remembered as little more than a speed bump in a historic run.