Micron Stock Plunge Widens on AI and Capex Concerns
Micron stock plunge deepened despite strong results as investors weighed heavy capex and TurboQuant, nudging repositioning and higher volatility.
KEY TAKEAWAYS
- Record fiscal Q2 revenue of $23.9 billion and 56.0% GAAP gross margin.
- Guided fiscal Q3 to $33.5 billion revenue and 67.0% gross margin.
- Shares fell about 30.0% after the report and another 10.0% as investors weighed $25.0 billion capex and TurboQuant.
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Micron Technology reported record fiscal second-quarter results on March 18, triggering a sharp stock decline as investors weighed aggressive fiscal 2026 capital expenditure plans and uncertainty over AI memory demand.
Record Quarter and Bullish Q3 Guidance
Micron posted fiscal second-quarter revenue of $23.9 billion and a GAAP gross margin of 56.0%, up from $8.1 billion and 36.8% a year earlier. The company guided fiscal third-quarter revenue to $33.5 billion and gross margin to 67.0%, citing strong demand for high-bandwidth memory (HBM) and broader AI-driven memory. The outlook assumes a continued AI supercycle and sustained pricing power.
Capex Plans, HBM4 Production, and TurboQuant Impact
Micron’s fiscal 2026 capital expenditures exceed $25.0 billion, focused mainly on cleanroom facilities and new fabrication plants, with further increases planned for fiscal 2027. HBM4 memory for Nvidia’s Vera Rubin platform entered mass production in late March, and the calendar 2026 HBM supply is fully sold out on price and volume.
On March 24, Google announced its TurboQuant compression algorithm, which claims to significantly reduce memory requirements for large AI models. This announcement raised investor concerns that efficiency gains could temper demand growth and increase the risk of oversupply as Micron ramps production.
Market Reaction and Shareholder Returns
Micron’s shares fell about 30.0% after the earnings release and dropped an additional 10.0% in early trading. The company raised its quarterly dividend to $0.15 per share, with an ex-dividend date of March 30 and payment scheduled for April 15. The payout ratio stands at 2.2%.
Micron’s balance sheet remains strong, with a debt-to-equity ratio near 0.13, a current ratio around 2.9, and a quick ratio about 2.3, providing financial flexibility amid heavy investment.
Investor sentiment will hinge on whether the company’s guidance holds as new HBM capacity comes online and AI memory-efficiency advances unfold.
