Micron (MU 5.68%) stock slipped 2% through 12:35 p.m. ET Monday as even more worries about the durability of demand for DRAM and NAND computer memory surfaced.
Perennial Micron bull Jordan Klein at Mizuho is doing his best to contain the damage with a note in support of Micron today... but it seems to be having limited effect.
Image source: Micron.
What's worrying Micron investors today
Over the weekend, we learned Apple (AAPL +4.88%) is petitioning the U.S. government for permission to skip purchases of overpriced Micron and Sandisk (SNDK 14.00%) memory chips, and buy from Chinese supplier CXMT instead.
CXMT primarily makes DRAM, not NAND flash, so this is really only a threat to half of Micron's business -- but it's an important half, as HBM DRAM demand is the primary driver behind Micron's profit margins right now. Worse, if Apple's just the tip of the iceberg, and other memory buyers begin begging for permission not just to buy cheaper chips, but to have a chance to buy any chips at all, wherever they come from -- then the pricing power that Micron gets from limited memory supplies could begin to evaporate.
NASDAQ: MU
Key Data Points
Should you worry?
So how big a threat is this, really?
Well, Mizuho analyst Jordan Klein points out that "DRAM and NAND supply is way below true end demand" right now -- with China or without it. And buyers may have to go without it, because (a) there's no guarantee the U.S. government will permit Apple to buy DRAM from CXMT, and (b) there's no guarantee China would permit it, either, as it struggles to produce enough DRAM for its own artificial intelligence ambitions!
Meanwhile, DigiTimes reports buyers may have to pay 2.5 times 2026 prices to secure DRAM in 2027. The boom times for Micron, I suspect, won't end anytime soon.
