Micron's Record Quarter Can't Break the Bearish Spell: Burry, SK Hynix, and a Meager Dividend Weigh
Published on 07/05/2026 at 16:32 | Redaktion boerse-global.de
On paper, Micron Technology has never looked stronger. The memory-chip maker delivered a fiscal third-quarter revenue of $41.5 billion, blowing past the $36 billion consensus, while earnings per share of $25.11 left estimates in the dust. The gross margin rocketed to 84.6% from 37.7% a year earlier. Yet the stock closed last week at €912.00 in Europe, down more than 17% from its 52-week high in late June. The disconnect between fundamental fireworks and market fizzle has rarely been wider.
The tension is epitomized by a famous bear. Michael Burry, who predicted the 2008 housing crash, has disclosed a short position in Micron and laid out a blistering critique. He calls the company's median return on invested capital of 4% and return on equity of 7% "frankly terrible." His core thesis: in every third quarter Micron destroys capital, and free cash flow has been negative in nearly half of all periods. For all the AI hype, Burry sees a cyclical trap — and he has also shorted Nvidia, warning of a 30% correction across AI-related chip stocks.
Bulls counter with the numbers that matter now. Revenue surged 345.7% year over year, and the company is guiding for around $50 billion in the current quarter. Analysts see a 12-month price target of $1,486, implying significant upside from current levels. The stock's year-to-date gain stands at an eye-popping 239.03%, and even after the recent selloff it trades 19.64% above its 50-day moving average of €762.26 — a level that technical watchers point to as the next major support should the decline continue.
Should investors sell immediately? Or is it worth buying Micron?
Adding to the bearish narrative, a direct competitor is about to land on U.S. turf. SK Hynix, the South Korean memory giant and leader in high-bandwidth memory chips, is set to begin trading on the Nasdaq as soon as July 10. The listing gives a fierce rival easy access to American investor capital at a time when Micron can least afford distraction. The move comes on the heels of Meta Platforms' signal that it is building its own AI processing service for third parties, a step many interpret as evidence of excess data-center capacity among the hyperscalers. That perception is prompting investors to rotate out of AI hardware names and into software stocks.
Micron's meager dividend payment only underscores the cash dilemma. The next quarterly payout of 15 cents per share — a pittance relative to the $25.11 in quarterly earnings — will go to holders of record on July 6, with payment on July 21. Critics argue the company could easily afford a far larger distribution, but management is hoarding cash for a capacity buildout of historic proportions. Capital expenditure is set to double to $27 billion in fiscal 2026 and exceed $40 billion the following year. The tight market conditions, driven by AI demand, are expected to persist well beyond 2027.
With a 30-day annualized volatility north of 116%, the ride is unlikely to smooth out anytime soon. Between Burry's bearish wager, SK Hynix's IPO, and the broader rotation out of chip stocks, Micron faces a confluence of headwinds that its record-breaking earnings have so far failed to dispel. The crucial test will come with the next quarterly report, when the $50 billion revenue target meets reality, and with it the question of whether the AI cycle still has room to run.
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