By Key Points
Is Micron (NASDAQ: MU) stock just a momentum stock now?
It kind of feels like it. After falling more than 25% over the past four trading days, shares of the semiconductor memory stock took off like a rocket this morning, surging 9.6% through 9:40 a.m. ET.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
The reason for this, says HSBC, is competing “narratives” about what’s going on in artificial intelligence.
Image source: Getty Images.
Everybody’s got an opinion
According to one theory, explains analyst Alastair Pinder, high profit margins at Micron and similar memory stocks have attracted the attention of China, which plans to flood the market with cheap, mass-produced memory chips, undercut Micron’s pricing, and steal Micron’s market share.
The recent IPO of Chinese DRAM manufacturer CXMT, raising $8.5 billion in cash for production expansion, supports this theory.
Roughly 20% of recent market volatility is explained by this theory, according to Pinder. A second theory, accounting for about 26% of volatility, is called “AI positioning capitulation.” Here, investors frustrated by the constant spikes and slumps in semiconductor stocks are simply exiting the sector to invest in more defensive stocks such as pharmaceuticals. Combined, these two prevalent theories help explain much of the selling in semiconductors we’ve seen over the past few days.
Today’s most popular opinion
But now here’s the theory that has investors excited about semiconductors, and memory stocks especially, this morning:
37% of market volatility, says Pinder, comes from the theory that AI hyperscalers — giant tech companies such as Google, OpenAI and Anthropic –are overspending on AI capacity. These companies will have a tough time when they finally realize they can’t generate enough revenue to justify their investments. In the meantime, though, Micron will make out like a bandit selling them overpriced memory chips!
That’s bad news for them. It’s great news for Micron, though.
Where to invest $1,000 right now
When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor’s total average return is 889%* — a market-crushing outperformance compared to 203% for the S&P 500.
They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor.
See the stocks »
*Stock Advisor returns as of July 30, 2026.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
