Micron Surges 18.9% on Q3 Beat, Slides 19.6% in AI Rotation Sell-Off
MU•Micron's stock surged 18.9% in June after fiscal Q3 revenue hit $41.46 billion and EPS reached $25.11 against expectations of $35.84 billion and $20.78. Investors have rotated out of AI chip names, sending shares down 19.6% after Meta unveiled its own AI compute service.
1. Q3 Beat and Strong Guidance
Micron reported fiscal Q3 revenue of $41.46 billion, surpassing the $35.84 billion consensus, and delivered EPS of $25.11 versus $20.78 expected. The company issued forward guidance of $50 billion in revenue for the next quarter, highlighting confidence in sustained memory demand.
2. June Rally Fueled by AI Demand
Shares jumped 18.9% in June as investors capitalized on robust AI memory chip orders and high-bandwidth memory (HBM) strength. Market optimism around Micron’s positioning in the AI sector drove trading volumes and elevated valuations.
3. July Sell-Off from Sector Rotation
In early July, Micron shares tumbled 19.6% from their lifetime high as funds rotated out of chip manufacturers into AI software and services. Profit-taking intensified following the June rally, contributing to downward pressure on the stock.
4. Meta's AI Service Raises Capacity Concerns
Meta’s announcement of its own AI compute service has raised fears of potential memory chip oversupply and pricing pressure. Investors worry that expanding hyperscaler capacity could weigh on Micron’s margins in upcoming quarters.
