Micron Technology Nears Record High, But Cyclical Risks Ahead

Micron Technology (MU) stock is near its all-time high of $145, driven by strong demand for high-bandwidth memory (HBM) and enhanced average selling prices and margins. However, the company's financial growth is likely to slow and eventually contract, with a reversal expected soon after. The next downturn is expected in late 2026 or early 2027, prompting the need to sell Micron stock completely by mid-2026 to avoid a significant downside risk.

Micron Technology (MU) stock is trading near its all-time high of $145, driven by robust demand for high-bandwidth memory (HBM) and improved average selling prices and margins. The company's stock has surged over 42% year-to-date, significantly outperforming the Nasdaq and S&P 500's gains of approximately 6% [1].

Strong demand for HBM, particularly HBM3E, has been a key driver of Micron's performance. HBM3E is crucial for AI accelerators like Graphics Processing Units (GPUs) or Application-Specific Integrated Circuits (ASICs). Micron's HBM3E is a component in Nvidia Corp.'s NVDA Blackwell and Rubin GPU lines and is also being supplied to other customers for use in GPUs and ASICs [1].

The favorable market and policy environment has also boosted Micron's stock. The recovery in the semiconductor market, coupled with efforts by the U.S. government to bolster the domestic semiconductor industry, has led to increased valuations for chip companies. Micron has benefited from a recovery in memory chip pricing and reported increased sales in both data centers and consumer markets [1].

Recent macroeconomic events have further added value to the industry. On July 4, 2025, President Donald Trump announced the "Big Beautiful Bill," which proposes to increase the semiconductor investment tax credit from 25% to 30% through 2026. This offers chipmakers an incentive to expand domestic manufacturing facilities [1].

Micron has been pursuing its growth ambitions through substantial investments in the U.S. On June 12, Micron and the Trump Administration unveiled plans to invest approximately $200 billion in U.S. expansion. This plan includes the development of two fabs in Idaho, up to four in New York, and the modernization of its existing Virginia plant. An additional $50 billion is earmarked for domestic research and development (R&D) to support Micron’s leadership in memory technology [1].

However, Micron faces certain risks. Following the quarterly results, Micron CEO Sanjay Mehrotra cautioned that the recent AI-driven demand might not be entirely sustainable, citing potential short-term distortions stemming from global trade tensions. He warned investors about tariff-related order pull-ins, suggesting that some customers may have accelerated purchases to circumvent potential trade disruptions [1].

Despite these risks, analysts remain optimistic. Twenty-six analysts have set a consensus price target of $149.77 for Micron. Based on the latest ratings from Baird, Susquehanna, and Stifel, the stock carries an average target of $168.33, suggesting a potential upside of 38.49% [1].

References:
[1] https://www.benzinga.com/markets/tech/25/07/46291393/micron-stock-soars-42-in-2025-but-ceo-warns-of-demand-pull-ins