900 Micron (MU), No Need to Panic Sell at a Loss

On July 7, before the US stock market opened, memory chips fell across the board. Micron dropped over 6%, Sandisk, Western Digital, Intel, and AMD also weakened. The Philadelphia Semiconductor Index saw a significant pullback, with the market filled with pessimistic voices about the cycle peaking and the AI bubble bursting.

1. Root Cause of the Plunge: Samsung Dragged Down, Micron Collateral Damage

Samsung's second-quarter operating profit surged 18 times year-over-year, but revenue missed expectations. South Korean stocks plummeted over 10%, dragging down the broader market and pulling Micron down with it.

Previously, Micron's earnings report pushed the stock to 1255 before retreating. Samsung also saw record earnings but a sharp stock price decline. Strong earnings do not mean short-term stock prices only go up.

2. Institutional Sentiment Overwhelmingly Bullish, No Bearish Views

Bank of America and UBS maintain Buy ratings with targets of 1550 and 1625 respectively. Citigroup added Micron to its favorable observation list. HSBC raised its target five times this year to 1700.

Over the past three months, there have been 29 Buy ratings, 1 Hold, and no Sell ratings. The average institutional target is $1564, implying potential upside of over 56%, with unanimous strong recommendations.

3. Solid Fundamental Logic, Long Gone from Traditional Cyclical Stocks

Micron has transformed into a core AI memory supplier. HBM is a critical necessity for AI computing power with a huge gap. The data center business is pushing toward $100 billion in revenue, with gross margins of 84.9% surpassing Nvidia, and mid-to-long-term guidance of 70%-75%, above historical peaks.

Long-term contracts lock in stable demand, and competitor capacity expansion is difficult to catch up in the short term.

Key Price Levels

Resistance: 1000, 1100, 1200
Support: 900, 850

Short-Term Trading

Accumulate in batches at 900-920, stop loss at 850; reduce half position at 1000-1050. Add positions on a breakout above 1050 with volume, stop loss at 980, target 1150-1200.

Swing Trading

Build positions at 900-950, stop loss at 850, target 1200-1500; downside risk only 10%, upside potential over 50%, excellent risk-reward ratio.

Long-Term Strategy

Hold with monthly fixed investment, target 1500-2000, betting on the AI memory supercycle and Micron's industry leadership.