Micron Expertise (NASDAQ: MU) inventory simply skilled one of many worst weeks of 2026, with shares falling round 19.5% prior to now 5 buying and selling days (as of March 26). The inventory is now down over 23.5% from its current excessive of $471.34 earlier this month, as buyers fear in regards to the sturdiness of reminiscence demand amid profit-taking and rising macro uncertainty.
The sell-off has been stunning, particularly after the corporate delivered strong efficiency within the second quarter of fiscal 2026 (ended Feb. 26).
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Micron has plans to extend capital expenditures (capex) to over $25 billion in fiscal 2026, with a good portion allotted towards future reminiscence capability enlargement. The corporate additionally expects construction-related capex to rise by greater than $10 billion 12 months over 12 months in fiscal 2027 because it builds out its world manufacturing footprint. In opposition to this backdrop, buyers are involved that reminiscence costs, at the moment supported by tight provide and robust synthetic intelligence (AI)-driven demand, may start to normalize, negatively affecting Micron’s future profitability.
Moreover, a current announcement from Alphabet round memory-efficient AI processing has triggered fears that AI workloads could require much less reminiscence, additional contributing to the current sell-off.
Nevertheless, this bearish narrative could also be ignoring the precise extent of provide constraints within the reminiscence market. Within the current earnings name, Micron’s administration highlighted that a few of its prospects had been receiving solely one-half to two-thirds of their medium-term reminiscence wants. The corporate additionally expects tight supply-demand situations to persist past 2026. Provide can stay constrained for a for much longer time as a consequence of restricted cleanroom capability, lengthy building lead instances earlier than new fabs develop into operational, and decrease effectivity beneficial properties in reminiscence output per wafer with new manufacturing applied sciences. The corporate can also be coming into into multiyear strategic buyer agreements, together with its first five-year deal, which offers higher demand visibility and provide commitments throughout reminiscence cycles.
Therefore, if Micron’s upcoming earnings proceed to validate provide constraints and rising AI-driven reminiscence demand, the current pullback may show a turning level or a wise entry level for long-term buyers.