Micron Technology Inc. (NASDAQ:MU) stock just suffered its worst month in more than a decade. But the more interesting question is what investors believe happens when today’s memory boom eventually ends.
Micron shares plunged 28.7% in July, the worst monthly performance since June 2015. The drop followed an extraordinary run, with shares surging more than 300% during the first six months of 2026.
Behind the drop was a mix of profit-taking across semiconductors, forced selling after the Aschenbrenner fund blowup, and growing fears over memory competition from China.
That reversal suggests investors aren’t questioning whether memory prices are strong today. They are trying to price what happens when they aren’t.
In a note shared Tuesday, Bank of America semiconductor analyst Vivek Arya thinks the market may be looking at the wrong memory cycle.
Even under assumptions resembling a traditional memory downturn, Arya estimates Micron could earn close to $100 per share.
That would still be more than eight times the roughly $12 earnings peak reached during the previous cycle in 2018.
What If Memory Prices Crash Again?
"Memory prices and margins will inevitably normalize at some point," Arya said.
BofA’s base case already assumes Micron’s DRAM prices decline 10% in calendar 2028 and NAND prices fall 18%. Even then, the bank estimates earnings of roughly $150 per share.
Its bear case goes much further.
"Even if we assume a bear case scenario where DRAM/NAND ASPs decline -30%/-40%," Arya said.
Those declines are consistent with historical downturns. Yet BofA estimates Micron could still earn close to $100 per share.
"We believe potential EPS to remain near $100 – well above prior-cycle peak of ~$12 in 2018," Arya said.
That is the central investment question after July’s collapse.
Micron’s previous cycle peaked around $12 in earnings per share in 2018. BofA’s bear case today is more than eight times that level.
At $829.50 on Aug. 3, Micron traded at just eight to nine times those bear-case earnings.
Arya said that valuation remains consistent with the stock’s historical "commodity-like framework."
In other words, the market may still be valuing the new Micron like the old Micron.
Why This Memory Cycle Could Be Different
AI is only part of the change.
The memory industry is also shifting from quarterly negotiations toward multi-year supply agreements lasting three to five years or longer.
BofA said Samsung and Micron expect roughly 50%–70% of capacity eventually to fall under long-term agreements. That won’t eliminate downturns, but it could improve supply visibility and reduce price volatility.
Meanwhile, AI demand remains strong.
BofA’s chart on page two shows rental prices for Nvidia’s flagship GPUs near historical highs in August, indicating customers still see substantial economic value in AI compute.
"Given raw compute is seldomly the bottleneck in AI inference, we view the GPUs’ integrated HBM memory […] as the actual component in high demand," Arya said.
Chinese competition is another concern. CXMT now represents a low-teens percentage of global wafer capacity, according to BofA.
But Arya sees its impact concentrated in commodity DRAM rather than HBM3E and HBM4 used for advanced AI systems.
Where Does BofA Stand on MU?
Bank of America reiterated its Buy rating and $1,550 price objective, implying 86.9% upside from Micron’s Aug. 3 price.
Memory prices will eventually normalize. Capacity will eventually arrive.
The debate is whether that means Micron’s earnings return toward historical levels.
After July’s 28.7% collapse, BofA’s answer is striking: even the downturn could produce earnings eight times higher than Micron’s previous peak.
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