Micron’s Rally Hits a Tax Speed Bump as Samsung’s Labor Woes and HBM4 Wins Bolster the Long View

Micron shares dip 8% on South Korea tax fears and overbought signals, but strong HBM4 demand, a Samsung strike, and record margins support a bullish outlook with $1,000 price targets.

The stars had aligned for Micron Technology in recent weeks. The company locked in its role as an HBM4 supplier for Nvidia’s upcoming Vera-Rubin platform, an ongoing labor dispute at Samsung Electronics threatened to tighten memory supplies further, and its own quarterly results showed a business firing on all cylinders. That rare confluence of catalysts drove shares to a fresh 52-week high of €693, putting the stock up 158% since the start of the year.

Then a siren from Seoul briefly punctured the euphoria. A South Korean government official floated the idea of a special levy on artificial-intelligence profits, triggering a sharp sell-off in Asian chip stocks. Micron lost more than 8% in U.S. trading, sliding to around $730, as the news combined with a technical warning: the Relative Strength Index had hit 85, deep in overbought territory. Higher-than-expected U.S. inflation data added to the pressure, locking in profit-taking.

The pullback, however, masks an underlying story that remains remarkably bullish. At the heart of it is the standoff at Samsung. The Korean giant’s biggest labor union is planning a nearly three-week strike starting at the end of May, threatening production of DRAM and NAND memory chips. With only three dominant players in the global memory market and supply margins already razor-thin, any production hiccup at one competitor instantly redirects demand to the others. For Micron—the only major U.S.-based manufacturer of both DRAM and NAND—that means additional pricing power at a time when the market is already running hot.

Micron’s management has taken steps to cement that advantage well beyond the near term. Chief Financial Officer Mark Murphy confirmed the company is shipping high-bandwidth memory of the fourth generation (HBM4) for Nvidia’s Vera-Rubin platform, with volumes already ramping this quarter. Crucially, all of Micron’s HBM capacity for 2026 is already fully contracted, and the company’s broader production lines for high-bandwidth memory are booked solid for the next two years. Even NAND storage has no spare capacity left.

The financials underscore the momentum. In its latest quarter, Micron posted revenue of $13.64 billion, up from $8.71 billion a year earlier, with adjusted earnings per share of $4.78 and operating cash flow of $8.41 billion. The net margin came in at a historically high 41% for the cyclical memory industry, while the gross margin hit an eye-popping 74% in a separate recent period that produced record revenue of nearly $24 billion. The company is plowing that cash back into growth: capital expenditure for the current fiscal year has been raised to more than $25 billion, funding advanced manufacturing nodes and a new fabrication plant in Central New York.

Analysts have taken note. D.A. Davidson and Deutsche Bank both carry price targets of $1,000, arguing that the structural shift in memory demand driven by AI infrastructure is no passing fad. As a sign of confidence, Micron recently lifted its quarterly dividend by 25%.

The near-term calendar offers more catalysts. This week, Micron is participating in a JEDEC industry forum on server and cloud AI infrastructure, where technical roadmaps for next-generation hardware—especially around real-time inference and energy efficiency for large language models—will be debated. On May 20, the company’s management is scheduled to speak at the J.P. Morgan Global Technology, Media and Communications Conference, where investors will be listening for the first concrete guidance on capital spending plans for fiscal 2027. That session could provide the clearest signal yet on whether the current growth trajectory is structurally sustainable.

For now, the combination of a rival’s labor turmoil, a locked-in HBM4 supply deal, and a balance sheet that can fund its own expansion gives Micron a powerful hand. The tax talk from Seoul may have rattled the stock in the short run, but the underlying supply-demand math for memory remains squarely in Micron’s favor.