Micron Technology shares rebounded 6% Monday as investors bought the dip after last week's AI selloff. The stock's forward P/E of 10 and sold-out HBM chip inventory through 2026 are drawing value-oriented buyers back to the semiconductor name.
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Micron stock climbs 6% as dip buyers return after AI selloff
Micron Technology Inc. shares climbed 6% to about $926 Monday as investors scooped up memory-chip stocks following last week's brutal AI-sector selloff that erased 12% of the company's market value in a single session.
The June 5 rout dragged Micron to $874 from a June 3 peak of $1,079, wiping out roughly $50 billion in market capitalization. The decline was triggered by spillover from Broadcom's earnings report and a strong jobs report that dimmed rate-cut prospects, rather than any company-specific weakness. The broader tech sector began recovering Monday, with the Nasdaq Composite climbing 0.86% to 25,929.66 and the S&P 500 adding 0.30% to 7,405.73. The Dow Jones Industrial Average slipped 0.16% to 50,786.01 as cyclical stocks lagged. Among AI chip bellwethers, Nvidia and Intel also gained alongside Marvell Technology, which jumped 10% on news of its upcoming S&P 500 inclusion. Apple dropped almost 2% after unveiling its Siri AI update failed to impress investors.
Micron's valuation case rests on extraordinary earnings momentum that sets it apart from peers. In its fiscal second quarter ended March 2026, revenue surged 195% year over year to $23.9 billion, with gross margins in its cloud memory business expanding to 74% from 55% a year earlier. The data center segment posted a gross margin of 74%, up from 47% in the same period last year, reflecting the pricing power Micron enjoys as one of only a handful of suppliers of high-bandwidth memory chips for AI accelerators. The company guided for fiscal third-quarter revenue of $33.5 billion — a 40% sequential increase — and gross margins of 81%, with earnings targeted at $18.90 per share, up from $12.07 last quarter.
At a forward price-to-earnings ratio of 10, the stock trades in value territory despite a 278% year-to-date gain. Its five-year PEG ratio of 0.37 suggests the stock is undervalued relative to long-term earnings expectations. The last time Micron's forward P/E was this low was in August 2025, when the stock traded at $119 per share before rallying 135% to close the year at $285. By comparison, the broader semiconductor index trades at a forward P/E of roughly 25, making Micron's discount unusually wide for a company with sold-out inventory and accelerating margins.
The Nvidia partnership, confirmed for the Vera Rubin AI chip architecture, provides demand visibility through at least 2027. Micron has already sold out of its high-bandwidth memory chips for the full calendar year, allowing the company to raise prices and sustain margin expansion. For investors, the key question is whether the selloff was a buying opportunity or a warning sign for the broader AI trade. Micron's fundamentals suggest the former, but the sector remains vulnerable to valuation compression if the Federal Reserve keeps rates higher for longer. This week's consumer price index release will be the next test for the AI trade.
This article is for informational purposes only and does not constitute investment advice.
[1] Why Micron Stock Is a Buy as It Claws Back Losses From AI Selloff[2] After Surging 918%, Is Micron Stock Still a Buy? Here's What History Says.[3] Stock Market Today, June 8: Marvell, Intel, and Micron Lead Tech Stock Rebound[4] Why Micron Technology Stock Skyrocketed 87.8% Last Month But Is Falling in June
