Micron Stocks Tumbles after $25 Billion Capex Commitment
Micron technology stock down on capex costs commitment and is now far below its Q2 stock value high.
Quick overview
- Micron Technology plans to increase its capital expenditures by $5 billion this year, totaling over $25 billion for 2026.
- Despite reporting a 196% increase in revenue for Q2, Micron's stock fell 7.33% amid concerns over rising capex and market conditions.
- The company faces challenges in meeting high demand for AI memory supplies while competing with smaller suppliers.
- Micron's stock price has dropped significantly from its March high of $461, raising concerns among investors about its future appeal.
Micron Technology (MU) has vowed to spend $5 billion more this year in capital expenditures, bringing its total capex costs to more than $25 billion for 2026.
Falling 7.33% on Thursday, Micron Technology’s stock has taken a big hit after a very promising quarterly report. They reported Q2 earnings of $23.86 billion on March 18th and recorded a 196% increase in revenue from the previous year. However, the company is now pledging to spend more on capital expenditures in 2026 than they made in the previous quarter.
Their stock is down sharply during a bearish session for the stock markets and for technology stocks in particular. As gas and oil prices rise to once again hit more than $100 per barrel, investors are cautious about going in on technology stocks from companies with out of control capex spending.
Bad Timing for Stock Decline
Today’s stock drop looks dangerous for MU at a time when technology stocks are suffering severe scrutiny for how money is being spent. There is also a supply chain shortage caused by increasing AI data center building. Micron Technology helps to provide AI memory supplies, and they are part of the three-way near monopoly that includes SK Hynix and Samsung Electronics.
While Micron Technology has profited substantially in recent months as demand for their products remains high, they may have trouble keeping up with demand. They are also at risk of losing contracts to other, smaller suppliers who may be able to meet demand better for some of their customers. The growing AI market needs high bandwidth memory, and Micron Technology is forced to keep developing new technology and double down on investments to ensure they meet consumer demand.
However, as they pour their profits back into development and infrastructure costs, they are looking less appealing to their shareholders. The stock is down to $356 per share, well below their March high of $461 per share that they achieved right around the time of their Q2 report. If their capex costs continue to rise, they may lose investors even while growing their customer base.
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