‘Cracks Begin to Appear,’ Says Investor About Micron Stock

Micron (NASDAQ:MU) sentiment has shifted in recent weeks, with the stock caught in a perfect storm of concerns around AI spending, global uncertainty, and the industry’s familiar cyclical risks.

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Another wrench was thrown into the MU gears just last week, when Google shared news of its TurboQuant technology that could dramatically reduce the memory needs for AI inference workloads. Micron had seen its sales, earnings, and stock price soar into the stratosphere thanks to increasing AI-related demands for memory, and this development has the potential to poke a massive hole in that growth story.

And quite a story of growth it’s been. Just last quarter, Micron’s sales of $23.9 billion were up an absurd 75% sequentially and jumped by 196% year-over-year. The company guided for $33.5 billion in revenue for the current quarter, along with a gross margin of 81%.

Impressive figures indeed, but investor Louis Gerard remains unconvinced.

“Micron is doing all it can to remain at the forefront of the AI industry’s needs, but cracks are beginning to form,” says the 5-star investor.

Gerard has some bones to pick with Micron, including the $25 billion in capex the company has planned for fiscal 2026. While this move is meant to shore up domestic production, the investor worries that it reflects an upcoming oversupply trap if the rapid AI growth starts to slow.

On that note, Gerard also wonders if Agentic AI – one of the key factors in the growth of the technology – has been oversold. The investor cites research that claims 80% to 95% of enterprise AI pilots fail to deliver the anticipated results.

“If hyperscalers like Microsoft or Google believe that they have overbuilt their data centers before these agentic systems produce clear corporate profits, the demand for $10,000 HBM modules could evaporate overnight,” adds Gerard.

While recent revenue growth has been impressive, the broader bullish thesis, according to Gerard, may rest on uncertain assumptions around AI-driven productivity gains and a narrow customer base. At the same time, competition from players such as Samsung and SK hynix continues to pose a risk to margins.

Adding it all up, Gerard is staying away, assigning MU shares a Sell rating. (To watch Louis Gerard’s track record, click here)

Wall Street, however, is looking past the recent pullback. The stock boasts a Strong Buy consensus based on 26 Buys vs. just 2 Holds, and the average 12-month price target of $533.40 points to 65% upside from current levels. (See MU stock forecast)

Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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