Micron’s AI Memory Slump Defies Data Center Demand
Micron (MU) shares plunged 18% in March despite surging demand for AI data center components. The selloff accelerated after March 18 earnings, with a 10% single-day drop before a feeble 4% rebound. Year-to-date gains now stand at just 2% after the stock erased most of its 270% annual surge.
Investors fear AI efficiency gains may reduce demand for high-bandwidth memory - Micron's key growth driver. This comes as AI models balloon in size, theoretically requiring more memory. Morgan Stanley's Joseph Moore counters: "There's just no indication that demand for memory or storage is going down." He highlights memory's critical role in agentic AI development.
Micron forecasts Q3 revenue above expectations, betting big on capital expenditures to capture AI-driven demand. The memory chipmaker's fate remains tied to AI infrastructure buildouts, alongside semiconductor peers like Nvidia (NVDA) and AMD.
