Micron just had its worst day in over a year, right before its quarterly earnings report, which is due after the market closes on Wednesday. The stock dropped 13% on Tuesday, ending at $1,054.89. This was its second-biggest percentage drop in the S&P 500 and the largest single-day decline since April 3, 2025, according to Dow Jones Market Data. The selloff was part of a wider downturn in memory chip stocks, which also pushed South Korea’s KOSPI index down 10%. SK Hynix and Samsung both fell more than 12%. Here’s what caused the drop and what it could mean for the upcoming earnings report.
Several factors contributed to the selloff. A note from Counterpoint Research warned that memory prices could weaken in 2027, when supply is expected to rise sharply. This added pressure to a sector that was already performing strongly. Mizuho said the note played a role in the decline but was not the only reason for it.
In addition to worries about memory prices, investors are starting to wonder if the high level of AI infrastructure spending can continue. If large tech companies are reaching the limits of their spending budgets, it could hurt the demand that has pushed Micron up 273% this year, SK Hynix up 292%, and Samsung up 159%.
Federal Reserve interest rate policy is another factor affecting the sector. If inflation stays high, markets expect several rate hikes in 2026. Higher borrowing costs reduce the value of future earnings, which makes yield-bearing assets more appealing compared to fast-growing stocks.
The upcoming earnings report on Wednesday is now the key short-term test for optimism about memory chip stocks. Revenue is expected to be almost four times higher than last year, and earnings growth could be even stronger. If the results are good, the stock could bounce back from Tuesday’s losses. But if Micron misses expectations or gives cautious guidance, it would confirm the worries that caused the recent drop.
