Micron Technology Inc. (NASDAQ:MU) stock rose about 1% in Monday's premarket trading as broader market sentiment improved. Nasdaq futures gained 0.20%, while S&P 500 futures climbed 0.15%.

The early gains come on the heels of a massive AI-driven rally that has propelled Micron stock up more than 200% year-to-date.

Memory Chip Boom May Be Nearing Its Peak

However, that bullish momentum is meeting growing skepticism on Wall Street. Rayliant Global Advisors Chairman and Chief Investment Officer Jason Hsu warned that the memory chip industry may be approaching a cyclical peak.

Hsu told CNBC on Monday that the industry has shifted from excess inventory and weak pricing to tight supply and stronger prices.

However, he said the outlook beyond the next two years remains uncertain as lower-cost Chinese competitors expand production.

Hsu warned that new supply could eventually lead to excess inventory and falling memory chip prices.

Chinese Competition Raises Long-Term Concerns

Hsu also said China's artificial intelligence advantage could increasingly come from hardware and infrastructure rather than software revenue.

He highlighted cheaper electricity, lower-cost AI models and industry consolidation as potential advantages for Chinese companies.

While current demand supports AI infrastructure investment, Hsu expects rising supply and competition to pressure memory chipmakers over time.

Riding a wave of frenzy around AI hardware, Micron stock has skyrocketed nearly 300% over the past twelve months.

MU Stock Technical Analysis

Micron remains in a long-term uptrend despite recent weakness.

The stock trades 21.6% above its 200-day simple moving average (SMA). Its 50-day SMA also remains above the 200-day SMA, supporting the bullish trend.

However, shares trade 9.8% below their 20-day SMA, 9.4% below their 50-day SMA and 8.5% below their 100-day SMA. These levels could limit near-term rebounds.

The moving average convergence divergence (MACD) indicator also signals weakening momentum. The MACD remains below its signal line, while its histogram is negative.

Key resistance stands at $1,042.50, while support sits near $887.50. A move above resistance could strengthen the recovery outlook. However, a break below support could increase selling pressure.

Micron's 52-week range spans $192.40 to $1,255. The stock has also gained 298.71% over the past 12 months.

Traders may watch the August swing low for support and the September swing high for potential resistance.

Analyst Outlook

Analysts maintain a consensus Buy rating, with an average price forecast of $1,622.38.

On Oct. 22, Rosenblatt maintained its Buy rating and $1,900 price target. Needham also maintained its Buy rating and $1,650 price target that day.

Rosenblatt previously reiterated its Buy rating and $1,900 price target on Oct. 13.

The stock trades at a price-to-earnings ratio of 11.8.

MU Stock Price Action

Micron shares rose 1.00% to $886.35 in Monday's premarket trading, according to market data.