Micron stock drops 5% as analysts weigh AI memory demand and $3,000 target

Micron Technology's stock fell 5.5% on Thursday as investors reassessed AI spending outlooks, despite Nvidia's CEO stating memory demand is unlikely to decline and D.A. Davidson reaffirming a positive rating with a $3,000 price target. Other memory-related stocks also declined, with SK Hynix's US-listed shares dropping 6%, while SanDisk and Western Digital fell over 8% and 7% respectively. The market reaction followed Micron's announcement of a new quarterly employee bonus program tied to company performance and additional compensation measures for Taiwan workers after union pressure over AI boom profit distribution. Nvidia CEO Jensen Huang told CNBC that a memory oversupply is unlikely before 2029, emphasizing that AI systems require greater memory capacity and bandwidth. D.A. Davidson analyst Gil Luria maintained a buy rating and $3,000 target, citing Micron's leadership in DRAM, NAND, and HBM technologies. Micron will introduce quarterly performance-based payouts starting fiscal 2027, calculated from after-tax profit minus estimated capital expenditures.