The memory chipmaker has become a study in extremes. Micron Technology is simultaneously riding the most powerful demand wave in its history and facing a bearish attack from one of Wall Street’s most famous skeptics. The tension between those two forces will define the stock’s trajectory for the rest of the year.
On the bull side, the numbers from the last quarter are hard to argue with. Micron generated $41.5 billion in revenue for the three months through May, a 345.7% surge from a year earlier. The artificial intelligence explosion has turned High Bandwidth Memory into the company’s crown jewel: HBM revenue alone exceeded $1 billion for the quarter, and every chip the company can make for calendar 2026 is already spoken for.
That demand is driving an aggressive capacity build. On July 4, Micron broke ground on a $9.3 billion expansion of its Hiroshima plant in Japan, a facility that will produce the next generation of HBM4 chips. The new memory is ramping twice as fast as its predecessor, and manufacturing yields are beating internal expectations.
The improved mix is showing up in the profit line. Micron reported an adjusted gross margin of 84.9%, while the GAAP gross margin climbed to 84.6% from just 37.7% a year ago. To lock in those gains and insulate itself from the industry’s notorious price swings, management has been signing multiyear customer contracts, some stretching into 2030. Company executives say requests from clients already outpace what they can deliver through 2028.
Enter Michael Burry. The “Big Short” investor has built a short position in Micron and publicly laid out his thesis: the company’s return on invested capital has averaged just 4% over time, its return on equity sits at 7%, and in roughly every third quarter it destroys free cash flow. “Frankly terrible,” Burry said of the capital efficiency. He argues that massive capacity additions from Samsung and SK Hynix are setting the stage for the next bust in the cyclical memory market.
Should investors sell immediately? Or is it worth buying Micron?
Micron’s stock price reflects this tug-of-war. At Friday’s close of €912.00, the stock gained 6.79% on the day but still suffered a loss of 8.40% over the previous seven sessions. The year-to-date performance remains stunning at 239.03%, and the 12-month return stretches to 778%. Yet the shares trade 19.64% above their 50-day moving average of €762.26, suggesting the long-term uptrend is intact despite the recent wobble.
The bear case extends beyond Burry’s spreadsheets. The consumer electronics market, which drives demand for standard DRAM and NAND, is showing signs of fatigue. PC and smartphone makers are pushing back against component price hikes, and the pace of price increases in commodity memory is flattening. That could dent Micron’s results if AI growth slows even modestly.
Meanwhile, SK Hynix has historically dominated the HBM segment and retains close ties with key hyperscale customers. Micron’s valuation is also a worry for some analysts: the trailing price-to-earnings ratio of 22.1 is above the five-year median of 20.6, leaving less room for error.
The next major test comes on September 29, 2026, when Micron reports fiscal fourth-quarter results. The company has guided for revenue of roughly $50 billion in the coming quarter, a target that will test whether the AI engine can fully offset cooling demand in PCs and smartphones. Analysts have set a consensus price target of $1,486 per share, implying significant upside from current levels if the bull narrative holds.
For now, Micron finds itself in a race between a sold-out order book and the gravitational pull of its own history. The KI wave is real, but so are the cycles that have buried memory stocks before. Which force wins will depend on whether the long-term contracts and capacity discipline can finally break the industry’s boom-and-bust pattern.
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