Micron's AI Chip Boom: Why Investors Are Still Optimistic Despite Stock Drop

Micron Technology's stock took a hit last week, dropping over 6% to close at €205. But don't let that fool you. Big banks are still bullish, with some setting price targets as high as $330. Why? Because Micron has already sold all its high-bandwidth memory (HBM) chips for AI use through 2026. That's a big deal. The semiconductor industry had a rough week, with companies like Western Digital also seeing losses. The worry? High valuations for AI stocks and rumors of delays in data center orders. But Micron's long-term outlook is still strong. Analysts are giving it a "Strong Buy" rating, pointing to the huge demand for its next-gen HBM3E and HBM4 memory chips. The catch? All the production capacity for these advanced chips is booked solid through 2026. Big investors are betting on Micron. For example, Adage Capital Partners increased its stake by 1. 1%, now owning over 1. 18 million shares. That's a $146 million investment. But here's a twist: company insiders have been selling shares. CEO Sanjay Mehrotra sold 3, 743 shares in early November. Executive Vice President Scott J. Deboer sold 82, 000 shares in late October. In total, insiders have sold $83 million worth of shares. Not surprising, given the stock's over 200% surge this year. Micron is making big changes. It plans to stop its consumer brand "Crucial" by February 2026. This move will let the company focus on more profitable enterprise and AI memory solutions. Demand in this area is way higher than supply, with DRAM and NAND flash memory prices jumping 80% to 100% in December. All eyes are on Micron's upcoming earnings report. The company will release its first quarter fiscal 2026 results on December 17. Expectations are high: earnings per share are expected to jump 114% year-over-year, and revenue is projected to rise 44%. If Micron confirms that its HBM production is sold out for 2026, the recent stock dip might look like a good buying opportunity. The stock's technical indicators show some volatility, with the RSI at 45. The 50-day moving average is at €196, which could provide some support.