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Micron Dips as AI Spending Fears Emerge
28 Apr
Summary
- Micron shares fell amid concerns about AI-related spending.
- OpenAI reportedly misses revenue and user growth targets.
- Analysts maintain a positive outlook on Micron's long-term demand.
Micron Technology Inc. saw its stock price decrease in premarket trading as investor confidence in AI growth stocks waned. This pullback is largely attributed to apprehension surrounding AI-related expenditures and user growth figures.
Recent reports indicate that OpenAI is not meeting its internal projections for revenue and new users. The organization is reportedly focusing on cost containment amidst significant subscriber churn and closer examination of data-center agreements. OpenAI had previously forecasted substantial advertising revenue for both this year and the distant future, alongside significant projected spending on computing power.
Despite these immediate concerns, industry analysts continue to express a bullish long-term outlook for Micron. Melius Research recently upgraded the stock, suggesting significant upside potential within the next twelve months. Analysts emphasize that the AI cycle is in its nascent stages and that the demand for memory components remains exceptionally strong, highlighting the "unusual durability" of demand and margins.
Technically, Micron's stock remains positioned favorably, trading well above its 20-day and 100-day simple moving averages, indicating a strong trend. However, its high relative strength index (RSI) suggests momentum has been intense, increasing the risk of sharper pullbacks on minor disappointments. Key resistance is noted near the 52-week high of $531.50, with support around the 20-day EMA zone near $447.50.
Looking ahead, Micron's next significant financial event is anticipated with its earnings report, estimated for June 24, 2026. Projections indicate substantial year-over-year growth in both Earnings Per Share (EPS) and revenue. The company's current valuation, measured by its P/E ratio, suggests a fair market standing relative to its peers. The analyst consensus remains strong, with a predominant 'Buy' rating and an average price target of $524.40, reflecting confidence in the company's future performance.
