Micron Falls 6% as AI Construction Fears Put Memory Prices in Focus

Micron Technology shares fell 6% as investors weighed whether a change in control of Congress could slow data-center construction and ease pressure on memory supplies. The decline came as the S&P 500 rose 2%, according to TIKR, which reported that Democrats won control of both the House and Senate in Tuesday’s midterms.

Investors viewed the election results as a potential brake on the AI build-out, TIKR reported. Newly elected officials and ballot measures could restrict data-center construction, according to the outlet. Shares of contractors and suppliers tied to that build-out fell, while Apple, a buyer of memory, gained ground.

Apple rose as data-center suppliers fell

Apple shares rose 6% to a record high. CNBC’s Mad Money host Jim Cramer said on X that a slower AI build-out could allow DRAM inventories to accumulate, benefiting Apple. “Apple winner… slowdown in build means inventories can build of DRAMs,” he wrote.

A slower build-out would allow memory buyers to restock and could cool prices that have been challenging Apple, according to TIKR. The outlet reported that Apple’s margin outlook disappointed investors after the company released results on Monday. Micron, as a memory supplier, is on the other side of that trade.

Quanta Services fell 12%, even though the contractor’s Oct. 29 third-quarter release showed a record $63.7 billion backlog and a higher 2026 outlook across every metric, TIKR reported. New awards could slow if newly elected officials make data centers harder to build, according to the outlet.

Comfort Systems USA fell more sharply than Quanta, with no news of its own, while Coherent also declined. TIKR said the drop in Coherent showed that investors were selling data-center networking stocks as well.

Micron’s gross margin reached 86.8%

Micron’s gross margin rose in each of the last six quarters, reaching 86.8% in the quarter ended Sept. 3, according to TIKR. The outlet attributed the increase to rising memory prices and said Micron is exposed if those prices cool.

Analysts expect Micron’s normalized earnings per share to more than double from $75.52 in fiscal 2026 to $176.50 in fiscal 2027, then reach $207.76 in fiscal 2028, according to TIKR. The outlet said those estimates depend on memory remaining expensive.

Micron traded at 4.7 times forward earnings at Tuesday’s close and at an even lower multiple after the decline, TIKR reported. The outlet compared the earlier multiple with levels near the top of the previous memory cycle in 2017 and 2018, saying the market was already pricing the company’s earnings as a peak.

Most 2027 output is committed ahead of December report

Micron management said on its Sept. 30 call that more than 75% of its 2027 output was committed, according to TIKR. The company can also start buying back up to $35.16 billion of stock on Dec. 9.

TIKR characterized those factors as a cushion and said the slowdown investors were selling had not yet shown up in the numbers. The outlet also said memory prices would fall if data-center construction stalled.

Micron is scheduled to report fiscal first-quarter results on Dec. 16. The company has guided to an adjusted gross margin of 86.25% for the quarter, according to TIKR. That forecast uses an adjusted measure, while the 86.8% figure for the quarter ended Sept. 3 is a reported gross margin.