Micron Technology (MU) shares have pulled back 23% from their record high, but the decline stems from a broad chip sector cooldown tied to rising bond yields, not weak demand. The company recently posted record revenue of $41.4 billion for the quarter ending in May, up from $9.3 billion a year earlier, and guided to $50 billion for the next quarter. While the near-term forecast remains bullish, a potential supply glut in 2028 presents the primary long-term risk for investors.
Micron stock has fallen 23% from its peak, with the decline driven by a broad cooling in the chip sector as bond yields climbed. Worries about a potential worker strike at its Taiwan factories and a reduction in stake by Norges Bank added pressure. The pullback occurred right after Micron reported a record quarter, not because of weak demand.
The Micron stock forecast for the next few quarters remains bullish. Revenue reached $41.4 billion for the quarter ending in May, with a gross margin of 85%, and the company guided to $50 billion for the next period. CEO Sanjay Mehrotra stated, “Even as we expect industry supply to improve gradually in 2028, we currently do not have line of sight as to when memory supply will be able to catch up with increasing demand.”
Nvidia CFO Colette Kress offered a similar timeline from the buyer’s perspective, noting, “Looking ahead, our preliminary expectation is for fiscal year 2028 revenue to grow approximately 70% year-over-year… we expect supply to remain a bottleneck at least through the end of fiscal year 28.” The primary risk for a Micron stock crash is tied to 2028, when new fabrication plants from Micron, SK Hynix, and Samsung are expected to ramp up and potentially end the supply shortage.
Micron closed at $956.08, with a market cap of $1.08 trillion. The 1-year stock price target from Wall Street sits at $1,513.11. If operating income reaches near $200 billion as some estimate, the current valuation appears inexpensive, which explains why analysts continue to raise their price targets.
