If you've been following the AI boom, you know that demand for memory and storage chips has been through the roof. But here's the thing: what happens when the industry can't build fast enough to meet that demand? That's the question rattling investors this week, and it's sending shares of Micron Technology, Inc. (Micron (MU)), Seagate Technology Holdings Plc (Seagate (STX)), and Western Digital Corp. (Western Digital (WDC)) lower.
On Tuesday, Micron stock fell in premarket trading after closing down nearly 6% in the previous session. The selloff isn't just about Micron—it's a broader industry worry. CNBC reported Monday that Seagate shares dropped more than 6% after CEO Dave Mosley made a sobering comment: building new factories or adding new machines "would take too long." That's a big deal when AI demand is surging and customers are hungry for more capacity.
Mosley's remark crystallized a fear that's been bubbling under the surface: the memory and storage industry might not be able to ramp up production quickly enough to satisfy the AI appetite. And if supply can't keep up, prices could spike, but so could the risk of customers turning to alternatives or the whole cycle getting out of whack.
Memory and Storage Stocks Extend Selloff
The pain wasn't limited to Micron and Seagate. Sandisk Corp. (Sandisk (SNDK)) fell 3% in premarket trading after a 5.3% drop Monday. Western Digital slipped 2.27% before the open, adding to a 4.84% decline the day before. Seagate itself was down another 1.73% in premarket after its 6.87% rout.
Investor Steve Weiss of Short Hills Capital Partners added to the drama by trimming his Micron position after the stock's recent rally. But he's not abandoning ship—he said he still maintains a longer-term bullish stance on the memory-chip maker. It's more of a "take some profits off the table" move than a vote of no confidence.
Micron Earnings and Analyst Outlook
For those looking ahead, the next big catalyst for Micron is its earnings report, expected around June 24, 2026. And the numbers are eye-popping. Analysts are forecasting earnings per share of $19.15, up from just $1.91 a year ago. Revenue is expected to hit $33.51 billion, compared to $9.30 billion last year. That's not growth—that's a rocket ship.
But with that growth comes a premium valuation. Micron trades at a price-to-earnings ratio of 32.2x, which is rich relative to some peers. Still, the analyst consensus is a Buy, with an average price target of $561.88. Some analysts are even more bullish: DA Davidson maintained a Buy with a $1,000 forecast on May 11, and TD Cowen raised its target to $660 on April 28. DA Davidson also initiated coverage with a Buy and a $1,000 target back in April.
Micron Price Action
As of Tuesday premarket, Micron shares were down 1.73% at $669.72. That's still well above the average analyst target, but the stock has had a massive run. The question now is whether the capacity crunch fears are a temporary hiccup or a sign of deeper structural issues.
For now, the market is voting with its feet—and those feet are heading for the exits. But if the earnings report delivers on those lofty expectations, the narrative could flip quickly. After all, in the world of AI, demand is the one thing nobody seems to doubt.
