Micron Technology Inc. (MU) is giving investors a bit of a split-screen moment right now. Bearish options activity is building across semiconductor stocks, while analysts keep pounding the table on strong AI-driven memory demand.

The stock traded lower by 2% on Monday. But zoom out and the picture is still wild: Micron has gained over 260% in 2026, powered by AI-driven demand for high-bandwidth memory (HBM), DRAM, and what can only be described as an enterprise storage crisis.

Bearish Options Activity Builds

Options traders increased downside bets across the semiconductor sector on Friday.

More than 180,000 puts traded in the VanEck Semiconductor ETF by midday, compared with about 50,000 calls. Roughly $46 million in premium was tied to puts versus $26 million in calls, according to ThinkOrSwim and SpotGamma data, CNBC reported on Friday.

Micron also saw significant bearish activity. SpotGamma data showed roughly $270 million in premium tied to likely put buying, including deep in-the-money contracts expiring in June 2028.

A group of trades involving puts with strike prices between $2,250 and $2,500 appeared to form part of a bearish spread. Taken at face value, the position represented about $14.5 million and behaved similarly to a synthetic short.

However, Volland founder Jason DeLorenzo cautioned against drawing firm conclusions from bid-ask activity.

"Spreads have difficulty being categorized by midpoint analysis as well, because dealers are willing to take a haircut on one leg while getting a better premium with the other," DeLorenzo said.

AI Changes Memory's Role

D.A. Davidson Managing Director Gil Luria remains bullish on Micron, arguing that AI has fundamentally changed the role of memory.

Luria recently raised his 12-month price forecast to $3,000 from $2,100, citing strong AI and memory demand.

He told CNBC that investors still view Micron through the lens of its historically cyclical memory business.

Three years ago, customers primarily used memory for storage. Luria said AI now makes memory central to model performance and speed.

"The more memory you put to a model, the better it works. The more memory, the faster the model works. The more memory, the bigger the context window," Luria said.

Longer Deals Could Reduce Cyclicality

Luria expects more than half of Micron's products to be sold through five-year agreements as Microsoft Corp. (MSFT), Amazon.com Inc. (AMZN) and Alphabet Inc. (GOOG) (GOOGL) increasingly design specific memory products into their data centers.

"The product is no longer a commodity, it's no longer sold like a commodity," Luria said. He believes longer contracts could make Micron's business more predictable than during previous memory cycles.

Buybacks Add Another Catalyst

Luria said Micron can resume share repurchases on Dec. 9, when restrictions on its buyback expire.

He noted that management has said it plans to use 100% of excess cash flow for opportunistic share repurchases.

MU Price Action: Micron Technology shares were down 1.78% at $1010.69 during premarket trading on Monday, according to market data.