Micron Drops 22% From $1,255 High Despite Record $41.5 Billion Quarter
Updated
Updated · The Motley Fool · Jul 6
Micron Drops 22% From $1,255 High Despite Record $41.5 Billion Quarter
3 articles · Updated · The Motley Fool · Jul 6
Summary
Micron shares sit about 22% below their June peak near $1,255 even after the company posted its biggest-ever quarter and guided to another record period ahead.
Revenue surged to $41.5 billion in fiscal Q3 from $9.3 billion a year earlier, while adjusted EPS reached $25.11 and gross margin hit roughly 85%; management then forecast about $50 billion in Q4 revenue and $31 EPS.
A July 2 chip sell-off knocked Micron down more than 5% after cautious commentary on AI demand rattled the sector, even though the company itself reported no deterioration.
The deeper overhang is memory cyclicality: Micron trades at about 22 times earnings, or under 7 times forward earnings, but that valuation assumes peak profits can hold as AI-driven HBM shortages persist.
Hedge funds are cashing out of AI stocks. Is the trillion-dollar promise of artificial intelligence starting to fade?
Big money is quietly leaving semiconductors. Which overlooked sectors are poised to capture the next wave of AI-driven growth?
Hedge Funds Exit Tech Hardware as S&P 500 Hits Record Highs: AI Valuations and Market Rotation in July 2026
Overview
In early July 2026, hedge funds continued to sell U.S. technology hardware and semiconductor stocks for a fourth straight week, reflecting a broader reassessment of AI-related valuations. Despite this, the U.S. equity markets posted a powerful advance in the second quarter, with the S&P 500 and Nasdaq-100 achieving their best results since 2020. Initial gains were led by large-cap growth and hyperscalers, but by quarter’s end, the rally broadened to include smaller and value stocks. This shift highlights changing investor sentiment, as the focus moves from AI investment scale to the need for clear, sustainable financial returns.