Micron Pullback Tests Entry Case as DRAM Shortage Extends

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Strong.Comeback is focusing on companies that experience declines in the last trading sessions but make significant recoveries to close higher.
 

•  06 Jul 2026
 

$MU Micron has already fallen 22%: is this an opportunity? Despite the sharp correction since the reports, Citi and UBS believe demand for memory chips will continue to grow, the shortage in the DRAM market will continue at least until 2028, and the recent declines may represent an entry point for investors. After months of sharp gains that made it one of the standout stocks of 2026, Micron Technology has entered a correction in recent weeks.

Since the publication of the financial reports at the end of June, the stock has lost more than 20% of its value, even though the company presented strong results and guidance that beat analyst forecasts. Despite the declines, major investment houses believe the central story of the memory market has not changed. The correction began shortly after the reports published by the company on June 24. Micron stock jumped immediately after the release to a new high, but later erased all the gains and even fell below the level where it traded before the results were published.

From the investor perspective, this is a sharp momentum shift in one of the flagship stocks of the artificial intelligence wave. At 22V Research, they explain that sometimes the inability of a stock to continue rising after positive news is actually a sign that expectations have become especially high. According to them, stocks that benefited from unusual momentum became a crowded investment, so even good news is not enough to keep pushing them higher. Alongside this, the market is trying to explain what stood behind the wave of profit taking.

Among the factors raised are estimates that Meta may slow the pace of data center expansion in the future after completing its current plans, alongside reports that Apple is examining the purchase of memory chips from China to deal with rising prices. Both reports increased concerns about a certain slowdown in demand. Despite the correction, Micron still shows an exceptional return since the start of the year, after rising by about 250%. The sharp gains came following growing demand for memory chips, which have become one of the most important components in artificial intelligence infrastructure.

The massive investments by technology giants in data centers have significantly increased memory chip consumption. Companies such as Amazon, Microsoft, Meta and Alphabet need large quantities of memory to allow artificial intelligence models to process and store huge amounts of information in real time. High demand created a relative shortage in the market, especially in DRAM chips, and allowed manufacturers to raise prices and improve profitability. For Micron, this is a significant change compared with the traditional business cycles of the memory industry, which over the years were characterized by sharp volatility between periods of shortage and oversupply.

Competitors, such as SanDisk and other memory manufacturers, also benefited over the past year from price increases and the expansion of investment in data centers, as memory became one of the main bottlenecks in the AI industry supply chain. Citi estimates that the recent declines have actually created an opportunity for investors. The investment house added Micron stock to its watch list for the next 90 days, based on the view that DRAM chip prices will continue to rise in the coming months. UBS also believes the recent weakness does not reflect a change in industry conditions.

Analyst Nicolas Gaudois left the stock with a $1,625 price target and argued that the declines are likely only a temporary correction, while underlying demand for memory chips remains high. UBS estimates that the memory industry is expected to generate aggregate free cash flow of close to $1.2 trillion in 2027. According to the bank, such an improvement in profitability could allow manufacturers to increase shareholder returns through buybacks, dividends or additional investments. One of the reasons for optimism is the price forecast.

According to UBS, DDR memory prices are expected to rise by about 32% in the third quarter of the year compared with the previous quarter, and then climb by another 18% in the fourth quarter. The bank estimates that the shortage in the DRAM market will continue at least until the second quarter of 2028. According to the forecasts, bit demand is expected to grow in 2027 by about 36%, while production supply will increase by only about 19%, a gap that the analysts say will not allow the market to reach balance in the near term.

Trump praised Micron, and the stock continues to fall. Wall Street closed mixed, what is expected tomorrow in Tel Aviv? If the shortage forecasts materialize and investment in data centers continues at the current pace, it is possible that the upward cycle of memory manufacturers has not yet reached its end, even after the sharp correction recorded in recent weeks. The setup keeps earnings momentum, multiple expansion and institutional flows tied to the same question: whether the selloff reflects a real demand break or a reset in positioning after a crowded AI memory trade.

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