Micron’s 256GB Module Launch Can’t Shield Shares From Tax Fears and Profit-Taking

Micron unveils 256GB RDIMMs with 40% performance leap, but shares fall 9% after South Korea’s windfall tax proposal rattles chip sector. Analysts remain bullish with $1,000+ targets.

Micron’s latest generation of high-capacity server memory arrived just as the stock hit an all-time high — and then promptly gave back nearly 9% on Tuesday. The pullback, which dragged the Xetra-listed shares from €676 to as low as €616 before a partial recovery to €652.90, underscores the tension between red-hot fundamentals and the growing political headwinds that have suddenly turned the chip trade shaky.

The new 256-gigabyte RDIMMs, built on Micron’s 1-gamma DRAM process, clock up to 9,200 MT/s. That’s a 40% performance leap over current production modules, Micron says, while power consumption per unit of capacity drops from 19.4 watts to 11.1 watts. For hyperscale operators running large language models — which devour fast memory — the combination means fewer sticks, lower electricity bills and less heat in the data centre.

The product news was meant to reinforce the AI growth narrative. Instead, it landed amid a selloff that rippled across the global chip complex after a senior political adviser in South Korea floated the idea of a windfall tax on AI profits to fund a citizen dividend. The proposal hit Samsung and SK Hynix hardest, but the contagion quickly spread. The Roundhill Memory ETF slumped 11.8%, the iShares Semiconductor ETF shed 6.9%, and Micron shares were caught in the downdraft.

For a stock that had nearly doubled year-to-date — up 142.71% — the valuation had already been stretched. The relative strength index stood at 77.9 before Tuesday’s drop, and the annualised monthly volatility clocked in at 85.95%. With the share price just 3.42% shy of a record, profit-taking was always a matter of when, not if.

The fundamental underpinning, however, remains formidable. In Micron’s fiscal second quarter, revenue surged to $23.86 billion from roughly $8 billion a year earlier. Gross margin reached 74.4%. The driver: a supply squeeze in both high-bandwidth memory and dense DDR5 modules that AI customers can’t easily replace. The company’s HBM production is sold out through the end of 2026, and a potential strike at rival Samsung could tighten the market further.

That scarcity has emboldened analysts. D.A. Davidson and Deutsche Bank both reiterate buy ratings with a $1,000 price target. Ross Gerber sees earnings of $57 a share by 2026 and a target of $1,140. Bernstein’s Mark Li, more cautious, points to rising contract prices and a $510 target. Some Street estimates for Micron’s earnings per share reach as high as $99.20. At a current P/E of roughly 36, the stock already prices in much of that optimism.

Institutional investors still hold more than 80% of Micron’s shares, signalling long-term conviction. The HighPoint Advisor Group recently boosted its stake significantly. Yet inside the C-suite, the tune is different. Insiders, including CEO Sanjay Mehrotra, have sold millions of dollars in stock in recent months — Mehrotra unloaded a large block in early May — a classic divergence that often precedes a technical correction.

Micron is betting big on the cycle: capital expenditure plans have been raised from $20 billion to $25 billion, reflecting the urgency to boost output. Meanwhile, Microsoft and Meta alone are expected to pour more than $300 billion into AI infrastructure. The question is whether the South Korean tax debate fades or escalates. For now, the balance between product momentum and political risk keeps the stock on a tightrope — strong enough to draw buyers on the dip, but vulnerable enough to swing hard on any negative headline.