Trump Hails Micron as 'Hottest Company in the World,' Stock Still Slides 5.5% Intraday

Micron Technology (MU) has been whipsawing in recent sessions, failing to hold gains even after a blowout earnings report. As of 2:30 PM ET on July 3, the stock was at $975.60, down 5.49% from the prior close of $1,032.28, with an intraday low of $950.28.^{[Motley Fool]} The stock had rallied in pre-market on July 2 as the chip sector bounced, but the momentum faded.^[Barron's]

Trump's Praise Fails to Stop Profit-Taking

On July 1, former President Donald Trump posted on Truth Social, calling Micron "one of the hottest companies in the world" and celebrating CEO Sanjay Mehrotra's pledge to invest $250 million in a "Trump account" to mark the 250th anniversary of the U.S.^{[24/7 Wall St.]} That presidential endorsement did little to stop the stock from falling 10.67% on the same day.^{[24/7 Wall St.]} The stock had already surged 754% over the past year and 227% year-to-date, giving it a market cap of roughly $1.17 trillion. "When a stock has already tripled in six months, marginal buyers need a bigger reason than a Trump tweet to chase it higher."^{[24/7 Wall St.]}

Adding to the pressure, CEO Mehrotra sold $32.7 million worth of shares on June 26 through a 10b5-1 plan, when the stock was near its 52-week high. While a pre-arranged trade, the sale "carries more weight" at current levels.^{[24/7 Wall St.]} Prediction market Polymarket had priced in a 98.5% probability of a decline before the open.^{[24/7 Wall St.]}

Earnings Beat Spurs Wall Street Upgrades

On June 24, Micron reported FQ3 (ended May 28) results: revenue of $41.46 billion, up 346% YoY and well above the $35.84 billion consensus; EPS of $25.11, also crushing the $20.78 estimate.^{[Motley Fool]} The company guided Q4 revenue to roughly $50 billion, up about 315% from the ~$11.3 billion reported a year ago.^{[Motley Fool]}

The beat triggered a wave of upgrades. On June 25, Deutsche Bank maintained a "Buy" and raised its price target from $1,500 to $1,550, with analyst Melissa Weathers calling the Q3 results "stunning" and noting the company cleared a high bar both strategically and financially.^{[Motley Fool]} The same day, DA Davidson reiterated "Buy" and hiked its target from $1,500 to $2,000, arguing the AI-driven demand cycle is far from over and that long-term supply contracts back that view.^{[Motley Fool]} On June 29, Cantor Fitzgerald also lifted its target from $1,500 to $2,000, maintaining "Overweight" and calling the multi-year contracts that lock in high-margin revenue a major positive.^{[Motley Fool]}

Supply Tight, but Cycle-Peak Fears Emerge

On the earnings call, management said demand for DRAM and NAND flash "continues to significantly outpace industry supply" and expects tight conditions to persist beyond 2027, driven by AI demand from data centers, premium PCs, smartphones, autos, and robotics.^{[Motley Fool]} To meet that demand, FY2026 capex is expected to hit $27 billion, nearly double FY2025, with quarterly capex rising further in FY2027.^{[Motley Fool]}

But a Seeking Alpha analyst downgraded the stock on July 1, arguing "Micron is now everyone else's problem." The note contends that Micron's rally isn't driven by AI itself but by a "side effect"—HBM capacity is crowding out non-AI memory, inflating average selling prices for the rest of the market.^{[Seeking Alpha]} The analyst sees this as a sign of the memory industry's cyclical nature and warns that current margin forecasts are unsustainable. Management's own Q3 guidance hinted at slowing margin expansion: Q2 had guided for 6.1% margin expansion, while Q3's guide was just 1.4%.^{[Seeking Alpha]}

More critically, SK Hynix plans to reallocate some HBM manufacturing capacity back to DRAM, which could ease shortages by year-end and accelerate price declines, adding risk to Micron's pricing power.^{[Seeking Alpha]} Separately, Samsung has announced plans to invest $648 billion in South Korean chip production over the next decade.^{[Motley Fool]}

Sector Moves and Market Sentiment

Micron's volatility isn't happening in a vacuum. On July 1, SanDisk (SNDK) fell 9.91%, Western Digital (WDC) dropped over 10%, and the iShares Semiconductor ETF (SOXX) gave back gains after a 6.19% weekly rally.^{[24/7 Wall St.]} That suggests the selloff was a broad-based profit-taking move, not a company-specific issue.

On the flip side, Micron's massive capex plans are a tailwind for equipment suppliers. Lam Research (LRCX), which gets 39% of its revenue from memory equipment sales, rose over 7% after Micron's earnings.^{[Motley Fool]} However, LRCX was also down 10.51% intraday, trading at $350.16.^{[Motley Fool]}

Micron currently has 16 strategic customer agreements, which are expected to generate roughly $100 billion in baseline revenue, with $22 billion already held as customer cash deposits.^{[24/7 Wall St.]} While the stock is under near-term pressure, the long-term fundamental support remains intact. Investors will be watching the upcoming Q4 report and the real-world impact of SK Hynix's capacity shift.

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