Micron recovers 43% as HBM demand offsets Broadcom concerns
Micron Technology shares recovered 43.1% for dip buyers to $1,074.66, reversing a selloff caused by Broadcom's earnings. Broadcom's guidance for AI semiconductor growth supports demand for Micron's HBM, where supply is sold out through 2026.
*this image is generated using AI for illustrative purposes only.
Micron Technology, Inc. shares have rallied sharply, rewarding investors who purchased the stock during a recent selloff linked to Broadcom Inc.'s second-quarter earnings. Dip buyers who entered near $751 are now sitting on gains of roughly 43.1%, with the stock trading at $1,074.66 as of Monday afternoon. The price action places Micron within striking distance of its 52-week high, reversing the declines that followed Broadcom's report.
Broadcom Guidance and AI Demand
Broadcom's Q2 transcript revealed that the initial selloff in Micron shares was likely based on a misinterpretation of market dynamics. CEO Hock Tan guided Q3 AI semiconductor revenue to approximately $5.1 billion, representing a 60% increase year over year. Tan further indicated that Broadcom "may actually see an acceleration of XPU demand into the back half of 2026 to meet urgent demand for inference." He confirmed that the 60% AI revenue growth rate observed in fiscal 2025 is expected to "sustain into fiscal 2026."
Distinct Business Models
The market reaction failed to account for the fundamental differences between the two companies. Broadcom's focus lies in custom XPUs and Ethernet networking, whereas Micron specializes in high-bandwidth memory (HBM). The two companies do not compete for HBM supply. Furthermore, Tan's commentary regarding inference acceleration suggests increased GPU cluster deployments, which in turn drives higher consumption of HBM.
Micron's HBM Supply Sold Out
Micron's fundamental position remains robust, with its entire 2026 HBM supply—including next-generation HBM4—already sold out. The company has secured pricing and volume agreements for these products, and negotiations for 2027 deliveries are currently underway. The market for HBM is constrained by mechanical limits on 12-layer stacks, with only Micron, SK Hynix, and Samsung Electronics producing at scale. Goldman Sachs projects the HBM total addressable market will grow from $35 billion to over $100 billion by 2028.
Market Performance
The broader market read indicates that the early June selloff was a reflex rather than an analysis of Micron's specific business drivers. Broadcom's gross margin guidance declined roughly 130 basis points sequentially due to a higher XPU mix, a factor unrelated to DRAM pricing or Micron's HBM contracts. While Broadcom shares trade at $392.58, below their 52-week high, Micron has essentially recovered. At the time of publication, Micron stock was up 9.03% at $1,070.29. Over the past month, the stock has gained about 42.6%, compared to a 2.2% rise in the S&P 500. Year-to-date, Micron is up roughly 263% against the index's 10.3% gain, trading just below its 52-week high of $1,089.29.
| Metric | Value |
|---|---|
| Current Price (Monday) | $1,074.66 |
| Dip Buyer Entry | ~$751 |
| Gain from Dip | ~43.1% |
| 52-Week High | $1,089.29 |
| 1-Month Gain | ~42.6% |
| YTD Gain | ~263% |
How will the successful pricing and volume negotiations for 2027 HBM deliveries influence Micron's revenue visibility beyond the current fiscal year?
What specific technological advantages does Micron possess in HBM4 production that could allow it to gain market share against SK Hynix and Samsung as the 12-layer stack limit approaches?
To what extent will the projected acceleration in XPU demand for inference workloads in late 2026 drive immediate capacity expansion in Micron's HBM manufacturing lines?
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