MU Stock Falls Premarket After Worst Month In 11 Years: Analysts Say Memory Demand Intact, See 85% Upside

Memory chip stocks have been volatile and fell as July came to a close, the market’s still-fragile sentiment.

• Micron stock plunged 29% in July.
• On Monday, KOSPI declined 5.2%, after a record rally in the previous session, pressuring U.S. memory stocks.
• “The key question for investors is when this cycle peaks and how far it falls thereafter,” Morningstar analysts said in a note.

Micron dropped nearly 2% in premarket trading on Monday, extending a turbulent stretch as memory stocks remain volatile.

Micron stock plunged 29% in July, marking its worst monthly performance since June 2005. The sharp pullback — despite an 18.4% rally on July 30 — underscores the market’s still-fragile sentiment toward chip stocks. The renewed selling suggests volatility could persist until investors find a more durable footing.

On Monday, KOSPI declined 5.2%, after a record rally in the previous session. Shares of Samsung Electronics, the world’s biggest memory chipmaker, ended 8.8% lower while those of SK Hynix fell 3.5%.

U.S. memory stocks and the Korean market have become increasingly intertwined lately due to the heavy weightage of Samsung, the world’s biggest memory chipmaker, and SK Hynix in the country’s benchmark index.

Analysts See MU Upside

Analysts and memory manufacturers continue to expect demand to remain elevated for at least the next two years, even as producers expand capacity to keep pace with soaring AI-driven demand.

“The artificial intelligence-driven memory pricing upswing is ballooning results,” Morningstar said in a new investor note. “The key question for investors is when this cycle peaks and how far it falls thereafter. We continue to expect downward pricing pressure in 2028 from new capacity additions, but our peak expectations have risen materially.”

The research firm raised its price target to $850 from $455 “driven by significantly higher upcycle expectations.” Micron reported eye-watering May-quarter results, beating revenue and earnings guidance by 24% and 31%, respectively, according to Morningstar. Revenue rose 346% year over year to $41 billion, and non-GAAP gross margin rose to 85% from 39% a year ago.

Currently, 40 out of 45 analysts rate the stock ‘Buy’ or higher, and the remaining five rate it ‘Hold,’ per Koyfin data. Their average price target of $1,522.26 implies an 85% increase from the stock’s closing price on Friday.

Retail View On MU

On Stocktwits, the retail sentiment for MU remained ‘bullish,’ amid high message volume.

“$MU - $SKHY has been BAD LUCK for memory chips. Idk what Korea's issue is with selling,” a trader said, referring to the Korean chipmaker SK Hynix’s Nasdaq listing last month.

Quarterly reports from SanDisk Corp. and Western Digital on Aug. 5 will offer more cues for the memory trade. Despite the July selloff, Micron shares remain 189% higher year to date.

For updates and corrections, email newsroom[at]stocktwits[dot]com.<