Micron Technology stock dropped 30 percent from its recent peak to close at $848 on Friday, July 17, despite reporting record third-quarter financial results driven by artificial intelligence demand, according to financial reporting from The Globe and Mail.
Record Earnings Fueled by AI Memory Chips
The semiconductor manufacturer generated $41.4 billion in revenue for its fiscal 2026 third quarter ending May 28, marking a 346 percent increase from the same period last year.
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Net earnings rose 1,368 percent year-over-year to $24.67 per share, fueled by strong sales of high-bandwidth memory chips across its business segments.
Executive forecasts project fourth-quarter revenue to reach $50 billion with earnings of $30.73 per share as a global memory shortage allows the company to set premium prices.
However, memory manufacturers are rapidly expanding production capacity, which analysts expect will eventually align supply with market demand and compress profit margins.
Corporate adoption of AI hardware faces potential headwinds as major enterprises evaluate operational expenses.
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A survey by UBS Group indicated that 60 percent of surveyed businesses are reducing AI expenditure by transitioning to lower-cost processing models.
Corporate clients including Walmart, Amazon, and Uber Technologies have introduced usage limits on artificial intelligence systems to manage departmental budgets.
Despite recent share declines, Micron is expanding production of its new HBM4 memory chips, which offer a 60 percent capacity increase and 20 percent greater energy efficiency than previous iterations.
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Nvidia has selected the architecture for its Vera Rubin computing systems, targeting a data center memory market that Micron projects will reach $100 billion by 2028.
