A single-day plunge of 10.57%: A test of faith for Micron worth trillions

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A single-day plunge of 10.57%: A test of faith for Micron worth trillions

Wednesday, July 1, 2026

On July 1, Micron ($MU) plunged 10.57% in a single day, closing at $1,032.28, wiping out over $100 billion in market value in a single day—and just a week ago, the company delivered its strongest earnings report ever, with revenue soaring 346% year-on-year and a record-breaking gross margin.

On the same day, Trump personally announced that Micron would invest $250 million into the "Trump Account" plan; a financial influencer on X mentioned it 19 times in one day, and CEO Sanjay Mehrotra told Jim Cramer on CNBC, "Micron is going all out."

The news was lively, but the stock price fell the hardest; On the same day, SanDisk plunged 10%, Western Digital dropped 7%, and the entire storage sector suffered losses.

Valuation cuts at the best times for earnings reports—is this the normal turnover in a bull market, or the first crack in AI storage faith?

Closed the day of trading $1032.28 ▼ -10.57%

December gains +755.6% ▲ Market capitalization of $1.17 trillion

Q3 revenue $41.46 billion ▲ Year-on-year +346%

From memory factory to AI arsenal: a thorough self-restructuring

Micron is one of the few storage giants worldwide that simultaneously masters both DRAM and NAND technologies, with operations spanning the United States, Taiwan, Japan, Chinese mainland, Hong Kong, and Europe. To meet the demands of the AI era, it reorganized itself into four major business units: Cloud Memory, Core Data Center, Mobile & Client, and Automotive & Embedded.

The signal from this architectural adjustment is very straightforward—servers and AI infrastructure have been placed as the highest strategic priority.

In terms of product lineup, Micron covers nearly all categories: from high-bandwidth memory (HBM), CXL memory, LPDDR, graphics memory, to enterprise and consumer SSDs based on 1y DRAM and G9 NAND leading processes, and even multi-chip packaging and NOR Flash. The phrase "technology leadership products" in the 10-K file isn't boasting—it's the foundation for profit expansion.

Commercially, it uses the Micron and Crucial dual brands, delivering products to nearly all end markets including data centers, PCs, automotive, and industrial through direct sales, channel distribution, and retail networks.

If we compare AI data centers to a city and GPUs as power stations, then Micron sells water, electricity, and granaries—not sexy, but inseparable for a day. The question is: why did the water and electricity sellers increase seven and a half times in 12 months?

23x P/E: Looks cheap, but is actually the most dangerous

Let's look at the hard data first. MU's current price-to-earnings ratio (P/E) is about 23.35 times, with earnings per share reaching as high as $44.21 over the past 12 months. The financial report for the third quarter of fiscal year 2026, released on June 24, showed quarterly revenue of $41.46 billion, a year-over-year surge of 346%, and non-GAAP earnings per share of $25.11, more than 20% ahead of analysts' expectations.

Cash flow is equally fierce

Quarterly operating cash flow was $25.39 billion, adjusted free cash flow was $18.3 billion, and cash and investments on hand were $30.2 billion. The previous assessment in the research report that "financial indicators are comprehensively missing and cannot anchor" has been completely rewritten by this report—the anchor exists, and it is exceptionally strong.

So, is a 23x P/E ratio still expensive for a company with a quarterly gross margin of 84.9% and guidance for $50 billion in next quarter revenue?

Veteran cyclical stock hunters will tell you

The cheapest P/E ratios for memory stocks often appear at the cyclical peak—because the E in the denominator represents peak profit, not regular profit. DRAM prices have risen 700% in four years, with an 84.9% gross margin unprecedented in the history of the storage industry. No one can guarantee that this E-profit rate can last for several years.

On the technical side, it's like a warning

The stock price deviated from the 200-day moving average by about 137%, which is extremely rare and severe overbought. The valuation conclusion given by the report is stretched—the performance is genuine, but the price has already priced in the most optimistic scenario for the coming years.

The breakthrough phase is not over, but the slope has become dangerously steep

The report identifies MU as a breakout stage: the bottleneck in AI infrastructure has shifted from computing power to memory bandwidth, HBM's share of total device costs has risen sharply, and Micron's 1y DRAM and G9 NAND process leadership have locked in the most explosive segment, prompting aggressive institutional repricing.

Even after the sharp drop on July 1, the stock price remains well above the 50-day and 200-day moving averages—the trend structure remains intact, and the market continues to accept the breakout narrative. However, the deviation from the 200-day moving average by about 137% means the slope of this upward channel has become so steep that there is no room for error. The breakout is still ongoing, but every step is on top of the profit-taking.

The third pole in Three Kingdoms Kill, and a rising disruptor

Storage is the world's most typical oligopoly sector. More than two-thirds of the DRAM and NAND market share is held by South Korea's giants, Samsung and SK Hynix: SK Hynix has long dominated NVIDIA's HBM supply chain with its first-mover advantage, while Samsung is aggressively expanding production in an attempt to regain lost ground.

Micron's approach is less about head-on confrontation and more about changing the rules—not engaging in a capacity arms race, but using strategic customer agreements with guaranteed volume floors to turn quarterly spot price games into long-term capacity allocation. Once a product passes system-level validation by a cloud giant, customers are almost unable to switch suppliers in the short term, and switching costs are the moat.

In the NAND and enterprise SSD sectors, SanDisk, Western Digital, and Kioxia remain tough competitors; After Intel divested its storage business, it has faded from the main battlefield.

The real new variable comes from China

Apple is reported to be lobbying the U.S. government to approve its purchase of low-cost DRAM from China's Changxin Memory (CXMT). This was one of the triggers for the July 1 sell-off. If even Apple wants to avoid expensive memory, how much longer can Micron's pricing power story continue?

The ceiling is still rising, but the price of the ladder has already increased eightfold

The global semiconductor storage sector itself is a trillion-dollar market, and Micron's full category coverage means its total reachable market is roughly equal to the combined industry of DRAM and NAND. AI is rapidly expanding its boundaries again: cloud vendors training cutting-edge models are heavily purchasing HBM clusters, enterprises are shifting to building their own computing power for open-source large models to break free from closed-source models, and decentralized hardware demand is shifting to enterprise and edge edges.

Looking solely at Micron's own guidance—next quarter's revenue is expected to reach $50 billion, with annualized growth approaching $200 billion—demand is exploding. However, the 755.6% increase over the past 12 months and 47.7% in the past 30 days indicate that the market has already factored in the most optimistic share and profit assumptions in the stock price in advance. The ceiling is rising, but the price you buy is set according to the ceiling.

Bulls' confidence: This time, the results have truly paid off

Unlike many AI concept stocks supported by narratives, Micron's bullish logic is backed by a whole row of hard data at the bottom:

▲ Bull Case

Short Ammunition: The more perfect the quarter, the closer to the top of the cycle

Bears do not deny earnings; they question persistence and price:

▼ Bear Case

Keep an eye on these time windows for the next two quarters

In the short term, the rhythm of stock prices is almost always dominated by the following events:

•	Q4 earnings report (expected late September): Whether the $50 billion revenue guidance is met is a decisive battle between bulls and bears, with a huge impact
•	Apple's approval direction for CXMT memory procurement (second half of 2026): approval would negatively affect pricing power, causing bulls to depress the otherwise
•	Persistence of HBM supply constraints (Q4 2026): The persistence of tight supply will continue to drive up the average price of 1y DRAM
•	Strategic customer agreement renewal (within FY2026): The guarantee clause continues to reaffirm the revenue floor
•	Expansion of AI inference workloads drives demand for enterprise SSDs (Q3-Q4 2026): The engine for the recovery of NAND business profit margins
•	Trump's account officially launched on July 4: sentiment-themed with limited impact on fundamentals

From cyclical to faith stocks: 755.6% over twelve months

Over the past 12 months, MU has staged an epic revaluation from traditional cyclical stocks to core AI infrastructure: a 755.6% increase, surging 47.7% in just the past 30 days. After Q3 earnings on June 24 far exceeded expectations, the stock price jumped about 14.6% in a single day, closing at a record high of $1,213.56 on June 25.

Then the script takes a sharp turn

After consolidating at high levels for less than a week, on July 1, profit-taking, hawkish interest rate rhetoric, and rumors of Apple purchasing Chinese inventory, the price plunged 10.57% in a single day, about 15% below its historical high. The first half validated the judgment of "AI reshaping memory economics," while the second half reminded everyone that when expectations run too fast, any slight movement can be amplified and trampled.

⚠️ Risk Notice • Memory cycle reversal: When supply and demand reverse, record gross margins and profits collapse simultaneously • If China's low-cost DRAM is approved to enter the supply chains of major clients, the pricing logic will be shaken • The stock price is severely overbought, and the reversion of the mean may trigger a deep correction • Operating across the US, Taiwan, Japan, China, and Europe, export controls and trade policies are highly uncertain • Customer concentration was not disclosed, and the impact of losing a single major client cannot be quantified

🟡 Neutral Earnings are real, overbought and cyclical reversal risks are real, and the odds are not on the side of chasing highers.

💬 Discussion Good company, bad price—wait for pullbacks but don't chase highs; MU real-time buy and sell positions, post MU to the official account for viewing.

Data source

•	Source: NextPick real-time market snapshot + Micron FY2026 Q3 earnings report and investor relations announcement + SEC filings + public reports from mainstream financial media such as CNBC, Yahoo Finance, Motley Fool (verified after the US East Asian market close on 2026-07-01).