Micron Stock Fell 37% in a Month. Who’s Wrong: the Market or Its Customers?
A company raising the price of its own product, with more than a third of its revenue under contract through 2030, is trading at less than nine times earnings. Either this is the biggest bargain in AI, or the market knows something about its customers that the numbers don’t show yet.
Key points
Micron stock lost 17.46% in a single session and is down 37.2% for the month, yet it’s still up 175% over the past year.
The company’s most profitable division has an 88% operating margin, but it was the only one to ship fewer bits than in the previous quarter.
Qualcomm’s mobile-chip revenue fell 26%, and it cited memory prices as the main reason.
Micron has 26 take-or-pay contracts and $32 billion in customer advances, but something is changing with the new ones.
At $656, the stock is trading at less than four times projected 2027 earnings, which can be read two ways.
Down 17% in a single day
Thursday, November 5, was Micron Technology $MU’s worst day in years. The stock closed at $656.39, down 17.46% from Wednesday’s closing price of $795.23. Headlines at noon calling it a 13% drop were actually optimistic—the session ended even lower. The price is down 37.2% for the month, and it’s only a few percentage points away from being half its 52-week high of $1,255.
There were two triggers, less than twelve hours apart. On Wednesday evening, Qualcomm $QCOM reported results showing mobile-chip revenue down 26%, citing expensive memory as the main reason. Then, on Thursday morning, Bloomberg reported that Micron had effectively halted construction of its Fab 11E facility in Taoyuan, Taiwan, amid a dispute with the union.
On top of that came the broadest chip sell-off in months: the Nasdaq lost more than 5%, Nvidia 9%, and SanDisk 22%. The market interpreted the results of the U.S. elections as a risk of tighter regulation on data-center construction, and memory stocks, already hit in October by fears of Chinese competition, reacted most sharply. The stock is still up 175% over the past year, while the S&P 500 is up just 9% over the same period, so investors had gains to take.