Micron Stock Drops 20%: Crisis or Opportunity? Analysts Say Industry Fundamentals Remain Strong

Driven by the artificial intelligence (AI) wave, memory giant Micron Technology (MU-US) saw its stock price surge as much as 637% over the past year. Despite recent market sell-off pressure causing the stock to fall over 20% below its 20-day and 50-day simple moving averages (SMA), multiple analysts believe the company's long-term fundamentals through 2027 remain strong, supported by supply-demand imbalances and technological upgrades.

Analyst Harsh Chauhan points out that AI data centers require significantly increased high-speed computing memory to sustain workloads for training, inference, and agentic AI. High Bandwidth Memory (HBM) is currently the most critical catalyst. Producing HBM requires three times the wafer capacity of traditional DRAM, leading to severe supply shortages.

Micron has shifted its production focus toward high-margin HBM, creating ripple effects on traditional DRAM and NAND flash memory. Due to capacity displacement, NAND prices have already doubled by the end of 2026, while DRAM prices have risen approximately 170% over the past year.

Regarding future price outlook, research firm Gartner forecasts DRAM prices could surge 125% this year, with NAND prices rising 234%.

On financial performance, analysts expect Micron's fiscal 2026 earnings per share (EPS) to grow nearly ninefold to $73.44, with fiscal 2027 earnings potentially doubling again. Chauhan analyzes that if Micron can maintain a reasonable price-to-earnings ratio by 2027, the stock still has significant upside potential.

On the recent stock correction, expert opinions vary. Wolfe Research senior analyst Chris Caso believes the current weakness reflects market expectation recalibration after a sharp rally. He emphasizes that capacity expansion requires building new fabs and takes time, so supply shortages may persist, with no significant oversupply risk expected before 2028.

Susquehanna senior analyst Mehdi Hosseini advises investors to remain patient. While the "easy money" has already been made during the earlier rally, he believes the long-term industry outlook remains positive. He suggests investors who haven't entered yet wait for better entry points, typically available toward the end of summer.

Technically, although short-term momentum has weakened and the Moving Average Convergence Divergence (MACD) indicates reduced buying pressure, Micron's stock remains above its 200-day moving average, suggesting the long-term uptrend remains intact.