Investors who feared missing out on Micron (MU), or FOMO, did not expect shares to drop from $471.32 to $422.90. The memory chip supplier posted strong fiscal Q2 profits and hiked its dividend by 30.4%.
Micron raised its dividend by 30.4% to $0.15 a quarter for a forward yield of around 0.13%. In the last quarter, the firm reported gross margins of 81%, above that of Nvidia’s (NVDA) 75%. Despite rising DRAM prices continuing throughout 2026, MU stock sold off.
Micron gained more than 50% ahead of the report, so speculators should have anticipated the “sell on the news” event.
The company has a gross margin guidance rising by 600 basis points sequentially. However, it did not issue margin guidance for the fourth quarter. Fortunately, tight demand beyond this year will boost profitability. AI needs more high-performance hardware. That is driving demand for high-performance memory.
Risks
Analysts predicted that a Microsoft (MSFT) Windows 11 refresh required newer computers. But the yearlong decline in MSFT stock is signaling headwinds ahead. High memory prices deter consumers from upgrading just to meet Microsoft’s hardware requirements. To save money, consumers who do not need Office software might install Linux. Linux is free and does not require much memory.
If consumers look for cheap solutions like installing Linux, it would hurt consumer memory demand. The good news is that Micron exited that market.
