Micron From Peak to Breakdown? MU Stock Down 13% as Sector Downgrades
Micron stock's blistering surge has abruptly stalled, exposing growing cracks beneath the AI-driven semiconductor rally.
Quick overview
- Micron stock has experienced a significant decline, dropping 13% in just two sessions as analysts express concerns over the sustainability of the AI-driven semiconductor rally.
- Despite strong earnings, including a 46% year-over-year revenue increase, investor sentiment has turned negative due to sector downgrades and fears of a potential pullback in AI-related spending.
- Technical indicators suggest that Micron's stock momentum is waning, with critical support levels now at risk of being breached.
- Increased competition from rivals and ongoing trade tensions further complicate Micron's outlook, raising concerns about future profitability.
Micron stock’s blistering surge has abruptly stalled, exposing growing cracks beneath the AI-driven semiconductor rally.
Micron’s Run Hits a Wall as AI Downgrades Trigger Sharp Selloff
Micron Technology’s explosive climb took a dark turn this week. After touching $261 early Monday, MU shares crumbled under sector-wide pressure, sinking below $230 at Tuesday’s close and sliding further in after-hours trading. The stock has now dropped 13% in two sessions, and the decline may continue as analysts question whether the AI boom is starting to lose steam.
For months, Micron (NASDAQ: MU) had been one of the market’s most celebrated winners, fueled by overwhelming demand for high-bandwidth memory (HBM) — the backbone of modern AI computing. Its year-to-date gain of 161% painted Micron as a central pillar of the semiconductor story. But this week’s reversal hints that the rally may have run ahead of fundamentals, especially as competitive and geopolitical risks reemerge.
Overheated AI Sector Feeds Fears of a Deeper Pullback
Despite Micron’s massive market cap of $256.48 billion and enviable financial strength, investors have begun questioning whether the surge was sustainable. Sentiment turned sharply negative after fresh sector downgrades from Rothschild & Co. Redburn, which cast doubt on the profitability of AI-related infrastructure spending. These downgrades — which also hit giants like Amazon and Microsoft — rippled across the entire semiconductor landscape and dragged Micron into the broader selloff.
By midweek, MU had plunged far below its peak, briefly touching $228 before drifting even lower after hours. The shift reflects fading confidence in AI-linked equities and mounting concerns that valuations have become detached from reality.
Strong Earnings Fail to Calm Nerves as Investors Shift to “Show Me” Mode
Micron’s fundamentals remain robust — but even stellar numbers have failed to prevent the downturn. In fiscal Q4 2025, the company reported:
- Revenue: $11.32 billion (+46% YoY)
- Adjusted EPS: $3.03 (well above estimaes)
- Full-year revenue: $37.38 billion (+49%)
- Net income: $8.5 billion (+998% YoY)
Much of this strength came from the data center division, now over 56% of total sales. Yet despite outperforming nearly every metric, investors are increasingly reluctant to overlook sector risk. Analysts warn that Micron’s success is now priced for perfection — leaving little room for error.
Technical Breakdown Signals Momentum Exhaustion
The technical picture has deteriorated rapidly. After setting new records, Micron’s chart now shows:
- $200 at the 50-day SMA as the nearest support
- A vulnerable $175–$180 zone beneath that
- Potential downside toward $160 if selling accelerates
Traders note that Monday’s peak now resembles a classic exhaustion top. Meanwhile, the 20-day SMA — once reliable support — is barely holding as selling volume increases.
MU Stock Chart Daily – The 20 SMA Has Been Broken As Support
Growing Competition and Trade Risks Darken the Outlook
Micron also faces intensifying competition in the HBM arena. Rivals Samsung and SK Hynix are aggressively scaling HBM4 production, while Chinese and Taiwanese players are racing to expand capacity. Analysts warn that a shift from undersupply to oversupply in 2026 could trigger price compression and margin pressure.
On top of that, trade tensions remain a wild card. Rare earth materials, essential to chip production, could become bargaining chips in future export disputes, adding uncertainty to Micron’s supply chain stability.
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