Key Takeaways
- Shares of Micron declined 5.25% on Monday following public statements from tech leaders at Anthropic, OpenAI, and SpaceX advocating for measured AI development
- Goldman Sachs researcher James Schneider anticipates Micron will report “another strong quarter” with Q4 FY26 revenue reaching $51.9 billion
- Analyst consensus forecasts Q4 FY26 earnings per share of $31.14, a massive increase from $3.03 in the prior-year period, while revenue is projected to climb over 345%
- UBS research indicates approximately 90% of the nearly $1 trillion in AI-related capital investments from 2025 through 2027 will be allocated toward memory infrastructure
- The Street maintains a Strong Buy rating on MU with a mean price target of $1,563.93, suggesting 69% potential upside
Micron shares tumbled 5.25% to approximately $930.90 during Monday’s trading session, extending previous week declines and erasing the entire month’s positive momentum. The sharp downturn followed weekend statements from executives at Anthropic, OpenAI, and SpaceX advocating for more cautious approaches to artificial intelligence advancement.
Competitor SK Hynix ADRs experienced a steeper 6.9% decline amid similar market sentiment.
However, Goldman Sachs analyst James Schneider maintains an optimistic stance as Micron approaches its Q4 FY26 earnings announcement on September 30. He anticipates the semiconductor manufacturer will deliver “another strong quarter,” pointing to ongoing supply-demand imbalances in the memory market.
Schneider has adjusted his projections upward before the earnings release. His updated forecast calls for Q4 FY26 revenue of $51.9 billion, approximately 3% higher than consensus expectations, alongside EPS of $32.54 and gross margin of 87.3%.
The consensus estimate for Q4 FY26 earnings per share is $31.14, representing a dramatic increase from $3.03 reported in the comparable quarter last year. Revenue projections anticipate growth exceeding 345% to $50.42 billion, fueled by artificial intelligence infrastructure demand and improving memory chip pricing.
Goldman’s Key Focus Areas
Schneider highlighted that market participants are monitoring two critical factors: whether Micron can sustain or expand its approximately 20% market position in high-bandwidth memory (HBM), and if the company will unveil new strategic customer partnerships with advantageous pricing structures.
The analyst’s calendar year 2026 revenue and earnings forecasts exceed Street estimates by 1% and 3%, respectively. He projects Micron will provide guidance indicating low-teens sequential revenue growth for Q1 FY27.
While optimistic about near-term performance, Schneider maintains a Hold rating on MU with a $1,100 price target, pointing to balanced risk versus reward dynamics. He also noted extended-term uncertainties regarding capacity expansion from competitors, especially Chinese manufacturers.
Understanding Monday’s Decline
The trigger for Monday’s market weakness stemmed from widespread AI safety discussions. Leadership at Anthropic, OpenAI, and SpaceX all issued public remarks during the weekend advocating for deliberate pacing or temporary pauses in AI advancement.
For Micron particularly, any indication of reduced AI infrastructure investment poses significant risk. UBS analysis suggests that roughly 90% of the approximately $1 trillion surge in AI capital expenditure anticipated from 2025 to 2027 will target memory components.
UBS economist Arend Kapyteyn projected that AI-related capital spending will approach $1 trillion this year, expanding to roughly $1.4 trillion by 2027, with memory expenses claiming an increasing portion.
Nevertheless, no major technology company has implemented actual reductions in capital spending plans. The Trump administration remains supportive of data center expansion initiatives, and Anthropic itself is reportedly advancing with IPO preparations that could establish a $2 trillion valuation.
Nancy Tengler, CEO and CIO at Laffer Tengler Investments, revealed she capitalized on the decline to increase her Micron holdings, emphasizing that the data center construction pipeline remains robust.
MU shares have surged 224% year-to-date and multiplied more than six times over the trailing 12 months.
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