Micron Shares Fall 8.9% on China Worries Despite Profit Beat (NASDAQ:MU)
29 July 2026
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2 mins read

Micron Shares Fall 8.9% on China Worries Despite Profit Beat (NASDAQ:MU)

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NEW YORK, July 28, 2026, 18:01 EDT — Micron Technology (MU.O) shares declined 8.9% as investor concerns about exposure to China overshadowed quarterly profit figures that exceeded expectations.

  • Micron shares finished regular trading at $820.53, a decline of 8.85%.
  • The stock remains 34.6% off its peak from June 25.
  • FactSet’s initial consensus for fiscal Q4 EPS stands at $31.16, holding steady over the past month.

Micron Technology, Inc. dropped 8.85% on Tuesday, finishing the session at $820.53 after reaching a low of $789.09. In late after-hours trade, the stock regained roughly 1.4% to trade close to $832.

The past five sessions saw a 15.5% drop. So far in July, the decline totals about 29%, calculated by closing prices.

Stock chart for NASDAQ:MU

The signal to investors is for a multiple reset, rather than an estimate reset. Early FactSet consensus for fourth-quarter fiscal EPS stands at $31.16, up from $31.06 a month earlier.

MeasureLatestReference pointChange
Share price$820.53$1,255.00 high on June 25-34.6%
Preliminary fiscal-Q4 EPS consensus$31.16$31.06 as of one month prior+0.3%
Price/annualized $31 company guide*6.6 times10.1 times at June 25 high-3.5 turns

This estimate is initial. The ratio uses a single quarterly EPS forecast, annualized by multiplying by four. It serves as a basic comparison method, rather than predicting the entire year.

Micron ended Tuesday trading at 6.6 times its annualized guided earnings per share. At its June peak, this ratio reached 10.1 times. The latest numbers indicate investors are pricing in a further earnings drop after the upcoming quarter.

Micron’s initial forecast remains positive. The company projects fiscal-fourth-quarter revenue at $50 billion, give or take $1 billion, marking a 20.6% increase from fiscal Q3 at the midpoint. Gross margin is expected to be close to 86%. Adjusted earnings per share are guided to $31, with a possible variance of $1.

The current revenue breakdown provides further insight. Combined, Cloud Memory and Core Data Center generated $25.29 billion, accounting for 61% of overall revenue. Gross margins for these segments were 83% and 87%, respectively.

These units are not exclusively high-bandwidth memory, or HBM. However, present profits are mainly tied to memory for data centres. That is significant since, at present, China’s most immediate risk is focused on commodity DRAM.

CXMT Corp sparked Tuesday’s action after the Chinese DRAM company secured $8.6 billion in Shanghai. Shares soared on debut, boosting its market value to around $539 billion. The float revived concerns that China’s DRAM capacity could ramp up more quickly.

Cameron Systermans, who oversees multi-asset strategies for Mercer in Asia, described the risk as “more of a long-term story.” He stated that CXMT is still several years behind top HBM suppliers. Reuters

The market showed scant differentiation. Shares of SanDisk Corp declined by 14.25%. SK hynix Inc. ADR slipped roughly 9%. Samsung Electronics Co., Ltd. tumbled 13.4%. The PHLX Semiconductor Index shed approximately 4.5%.

Micron holds more contract coverage compared to previous cycles. Sixteen strategic deals encompass around 20% of DRAM volume, while agreements span one-third of NAND volume until 2030. Fourteen of these contracts secure approximately $100 billion in minimum revenue. Micron anticipates $22 billion in deposits and related commitments.

Chief Executive Sanjay Mehrotra said the agreements will enhance “durability and predictability.” However, they apply to only a portion of Micron’s production. Certain prices are still connected to market dynamics. Micron Technology

SK hynix will release earnings on Wednesday, the same day the Federal Reserve announces its rate decision. Key AI purchasers are expected to report results this week as well.

Risks: The 6.6-times ratio reflects one robust quarter on an annualized basis. Shifts in memory pricing can precede forecast changes. Rapid expansion of Chinese output may weigh on the wider DRAM market. Reduced AI investments would further impact HBM demand.

Forecasts for the near term remain steady, even as the share price declines. Investors appear to be anticipating weaker results for Micron after the coming quarter.

Related articles: NASDAQ:MU

What led to Micron shares dropping 8.9% on Tuesday?

Micron ended Tuesday at $820.53, down 8.9%, with trading volume near 58 million shares. The Philadelphia Semiconductor Index lost 4.5%, reflecting sector-wide weakness. Investor anxiety increased as CXMT’s listing and reports of local lithography advancements in China fueled fears. Worries also mounted around AI infrastructure funding and whether capital expenditures can be maintained. Micron trailed the sector index by around four percentage points, indicating the market is factoring in memory competition risks specific to the company. Investors

Is Micron’s valuation appealing after the recent selloff?

Micron is currently trading at $820.53, which is 34.6% under its 52-week peak of $1,255. In Tuesday’s session, its decline for July came to about 29.5%. The company’s trailing P/E stands near 18.6, based on reported EPS of $44.17. While this valuation appears moderate, memory sector profits can decrease abruptly. Margin sustainability is more critical to valuation than recent performance. Google

How robust is Micron’s forecast for its fiscal fourth quarter?

Management forecasts revenue of $50.0 billion, plus or minus $1.0 billion. The midpoint points to 20.6% sequential growth over fiscal third-quarter revenue. Non-GAAP EPS guidance stands at $31.00, with gross margin anticipated at close to 86%. This follows a record quarter with revenue of $41.46 billion and adjusted EPS of $25.11. Micron did not factor in potential trade or geopolitical impacts in this guidance. Micron Technology

Do DRAM and NAND prices continue to increase?

During the fiscal third quarter, DRAM prices advanced by a rate in the low-60% range compared to the previous quarter. In the same timeframe, NAND prices climbed in the mid-80% range. Bit shipments grew by a low-single digit percentage for DRAM and a mid-single digit percentage for NAND. Management anticipates that price growth will ease significantly in fiscal Q4. This guidance does not indicate a projected decline.

Is it likely that the memory shortage could extend past 2027?

Micron projects ongoing tightness in DRAM and NAND markets past 2027. The company anticipates industry DRAM bit shipments will increase by a low-to-mid-20% range in calendar 2026. NAND bit shipments are forecast to grow approximately 20% during that year. Gradual improvements in supply are expected in 2028, although management does not specify when supply will fully catch up. This outlook reflects company guidance and does not guarantee demand will remain strong.

To what extent is Micron’s growth connected to AI and HBM?

Data-center revenue surpassed $25 billion, indicating an annual run rate of over $100 billion. Cloud Memory revenue jumped 78% from the previous quarter to reach $13.8 billion. Core Data Center revenue saw a twofold increase sequentially, hitting $11.5 billion. Micron has shipped in excess of $1 billion in HBM4. However, overall DRAM and NAND pricing remained the primary drivers for the quarter.

Do Micron’s updated customer agreements lessen its cyclicality?

Micron has entered into 16 strategic deals spanning data center, consumer, and automotive sectors. Most of these contracts extend until 2030 and rely on take-or-pay commitments for volumes. The agreements account for approximately 20% of DRAM and one-third of NAND output. Fourteen of these carry minimum remaining revenue totaling about $100 billion. Micron anticipates $22 billion in deposits and associated financial guarantees. While the structure aims to lessen volatility, certain pricing remains influenced by the market.

What level of competitive challenge does China’s CXMT pose?

CXMT ranks as the world’s fourth-biggest memory chip maker. If completed, its proposed fabs could produce over 600,000 wafers each month. The company’s HBM technology is still about two generations behind the top competitors. CXMT is raising prices rather than saturating the market with low-cost supply. The main risk appears to be longer-term, but the impact depends on capacity growth and uncertainties from export restrictions. Reuters

Is Micron able to finance its record-setting capital spending plan?

Operating cash flow for the fiscal third quarter was $25.4 billion, while adjusted free cash flow was $18.3 billion. Cash holdings and investments amounted to $30.2 billion, compared to $5.7 billion in debt. Capital expenditures for the fiscal fourth quarter are expected to reach nearly $10 billion, which will bring annual capex close to $27 billion. In fiscal 2027, quarterly capex is set to surpass this figure. The balance sheet remains robust, though risks persist around construction execution.

What factors might impact Micron’s stock in the next week?

Microsoft and Meta are set to release results on Wednesday, with Amazon reporting on Thursday. Their AI-capex announcements could impact expectations for data-center memory usage. Micron does not have any scheduled event before the KeyBanc forum on August 10. Investors are tracking whether the chip index steadies after a 4.5% fall on Tuesday. Trading in the near term is likely to be highly responsive to news. Microsoft

Shan Ahmed Khan Latest posts

Shan Ahmed Khan is a senior markets reporter at TS2.tech, specializing in stocks, technology and macroeconomic trends. A graduate of the Lahore University of Management Sciences (LUMS), he previously worked in investment research and market analysis. His coverage helps readers understand the key developments influencing global financial markets and emerging industries.

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