Key takeaways
- Micron stock retreats after surging nearly 12% Wednesday
- AI memory shortages support record revenue expectations
- Investors question whether semiconductor earnings growth can last
Micron Technology (NASDAQ: MU) shares faced renewed selling pressure on November 12 after surging nearly 12% in the previous session, as investors reassessed the sustainability of the artificial intelligence memory boom and the chipmaker's extraordinary earnings growth.
MU stock closed Wednesday at $811.30, gaining 11.89%, before retreating approximately 3%-4% in Thursday's early premarket trading. The reversal followed a turbulent week that included a 17.5% collapse on November 5 and a subsequent rebound across semiconductor stocks.
The latest pullback comes despite Micron's record fiscal 2026 earnings, which showed fourth-quarter revenue reaching $54.23 billion, compared with $11.32 billion a year earlier.
Why Is Micron Stock Facing Fresh Volatility?
Micron's Wednesday rally followed stronger confidence in AI infrastructure investment after CoreWeave reported accelerating cloud demand.
The company's nearly 12% stock surge coincided with gains across semiconductor, storage and networking companies.
CoreWeave reported $3.66 billion in quarterly revenue, up 168% annually, while its contracted revenue backlog reached $132.5 billion. Those results helped ease concerns that hyperscale customers were sharply reducing AI spending.
However, Thursday's retreat indicates that investors remain cautious about the sector's valuation and financing risks.
The latest CoreWeave earnings report also revealed substantial borrowing obligations, highlighting the enormous capital requirements facing AI infrastructure developers.
Micron benefits from these investments because AI accelerators require high-bandwidth memory to process increasingly complex workloads.
Still, stronger AI demand does not necessarily prevent abrupt changes in semiconductor share prices.
Micron's $54B Quarter Shows Strength of AI Memory Demand
Micron's financial performance has accelerated as shortages of advanced memory chips boost prices and profitability.
Fiscal fourth-quarter revenue increased approximately 379% year over year, while GAAP net income reached $37.7 billion.
The company expects fiscal first-quarter 2027 revenue of $61.5 billion, plus or minus $1.5 billion, with adjusted gross margins around 86.25%.
Demand for high-bandwidth memory, particularly HBM4, remains a major growth driver. Micron has already begun high-volume shipments of HBM4 and expects its next-generation HBM4E products to enter volume production in 2027.
The tight supply environment has also affected consumer electronics. Apple's recent memory-cost warning showed how rising chip prices can benefit suppliers while reducing manufacturers' profitability.
Micron expects DRAM and NAND supply-demand conditions to remain constrained beyond 2027.
Can AI Memory Demand Sustain Micron's Stock Rally?
Despite strong earnings, investors remain concerned that semiconductor profitability could eventually normalize as new manufacturing capacity enters the market.
An earlier AI stock valuation reset showed how quickly investors reduced earnings multiples even as chipmakers reported record demand.
Memory producers are especially sensitive to supply cycles because additional capacity can eventually weaken pricing power.
However, Micron's expanding long-term customer agreements may provide greater visibility into future orders and revenue.
Wells Fargo recently adopted a less negative outlook on AI infrastructure stocks, while warning that heavy investment and depreciation expenses could pressure future earnings.
