Micron’s Rally Hits a Speed Bump: GM Pact and HBM4 Bonanza Can’t Stall the Sell-Off

Micron Tech secures multi-year GM contract for high-performance memory, but shares plummet 11% on profit-taking in semiconductor sector; HBM4 capacity sold out through 2026.

Micron Technology landed a blockbuster supply deal with General Motors on Wednesday, locking in a multi-year commitment to deliver high-performance memory chips for the next generation of vehicle platforms. The agreement, which leans on Micron’s revamped plant in Manassas, Virginia — a site backed by $2 billion in capital expenditure — marks a deliberate push beyond the company’s core AI-driven business. Yet the market’s reaction told a different story. The same day, Micron shares slumped nearly 11% as a wave of profit-taking swept through the semiconductor sector, erasing $250 billion in market value across the industry in a matter of hours.

The GM pact is a strategic hedge. Modern cars increasingly rely on sophisticated memory for driver-assistance systems and AI-powered cabin features, and automotive platforms demand chips that can operate reliably for a decade or more. Micron’s Manassas facility, which began production early this year, is tailored to those durability standards. But even as the company diversifies into autos, its core earnings engine remains High-Bandwidth Memory (HBM), the specialty chips that power Nvidia’s AI accelerators. Micron confirmed that its entire HBM4 production capacity for 2026 is already sold out under binding contracts. That scarcity, combined with 16 strategic customer agreements covering roughly a quarter of total revenue and a planned volume of about $100 billion, underpins a business that produced a staggering $41.46 billion in quarterly revenue — a 346% year-over-year surge.

None of that spared Micron from a brutal reversal. Over the past week the stock has shed 20% of its value, closing at EUR 848.40 after a 7% single-day drop. The sell-off was not an isolated event. In South Korea, Samsung lost more than 9% on Thursday while SK Hynix cratered 14%, mirroring a rout that began on the Nasdaq and spread to Asia. Sandisk also suffered a double-digit overnight decline. Analysts see the pattern as a collective repricing of AI-memory euphoria rather than a Micron-specific blow-up. The shares had rocketed 215% since the start of the year and more than 720% over the past twelve months. Such explosive gains invited profit-taking, and the technicals confirm the strain: Micron now trades about 23% below its 52-week high of EUR 1,103.80, touched on June 25, though it still sits roughly 23% above its 50-day moving average.

Adding a political twist, President Trump boosted Micron on his Truth Social platform, calling it “one of the hottest companies in the world” after CEO Sanjay Mehrotra pledged $250 million to the so-called “Trump Accounts” — a government savings program that gives families a USD 1,000 starting deposit per child. Micron will match that for its own employees and contribute an extra $250 per eligible child in selected states, reaching up to a million minors. The market shrugged. Momentum traders, focused on chart patterns, ignored the gesture entirely.

Meanwhile, the competitive landscape is shifting. South Korea’s SK Hynix is set to begin trading American Depositary Receipts on the Nasdaq on July 10, offering US investors a direct pure-play alternative to Micron for the first time. That listing, combined with the current sector-wide drawdown, raises the stakes for Micron’s management. Yet the company’s fundamentals remain anchored: customers have already parked $22 billion in prepayments as security, and Micron is ploughing more than $200 billion into domestic fabrication and R&D.

The GM deal may provide a stabilizing narrative over the long term, but for now the market is recalibrating what it is willing to pay for growth. As one strategist put it, a structural shortage of chips does not immunize even the strongest stocks from sharp, wave-like corrections when large investors decide to take profits. July’s start is shaping up as a stress test for an industry that has ridden the AI wave harder than almost any other.