Shares of Micron (MU) fell 7% in Friday trading, giving back part of the stock’s 3.2% gain from Thursday. Despite the pullback, the memory chipmaker ended the week with an advance of approximately 6% after rising in three of the five trading sessions.

American depositary receipts of SK Hynix also declined on Friday, dropping 8.8% after gaining 2.6% in the prior session.

The losses came after a difficult month for memory semiconductor stocks. Over the past 30 trading days, Micron shares have fallen 12.8%, while SK Hynix’s Seoul-listed stock has declined by nearly one-third over the same period.

Investor questions about the sustainability of memory chip pricing have weighed on the sector, even as both stocks recovered during the week. The memory industry has historically moved through pronounced boom-and-bust cycles driven by supply gluts and demand spikes, and some market participants are questioning whether the current AI-driven upcycle can sustain its pricing power.

One supportive data point came from Alphabet’s latest quarterly earnings, which showed continued growth in data center capital expenditures. That disclosure was viewed as encouraging for memory semiconductor manufacturers such as Micron. Although Alphabet recorded the largest single-session market capitalization decline in its history, its outlook for data center spending helped lift memory stocks toward the end of the week.

Bank of America Reaffirms Buy Rating

Bank of America reiterated its Buy recommendation on Micron during the week and maintained a $1,550 price target, implying approximately 65% potential upside from current levels.

The bank rejected concerns that China’s Kimi K3 AI model would reduce spending on AI infrastructure. The emergence of Kimi K3, developed by Moonshot AI, had prompted worries that more capable open-weight models from China could erode the competitive advantage of U.S. hyperscalers and reduce their infrastructure outlays. Instead, BofA said more efficient AI models could increase demand for high-bandwidth memory (HBM), DDR5, and NAND storage products. HBM, which stacks memory chips vertically to deliver the massive data throughput required by AI accelerators, has become one of the most strategically important segments in the semiconductor industry, with Micron competing alongside Samsung and SK Hynix for share in a supply-constrained market.

BofA also said open-weight AI architectures could materially expand Micron’s total addressable market by drawing thousands of enterprise customers that deploy AI models on their own infrastructure instead of relying only on large hyperscale providers.

Micron currently trades at about 21.5 times trailing twelve-month earnings and 13.1 times forward earnings, below the semiconductor sector average. Other financial institutions, including KeyBanc, TD Cowen, Bernstein, and Citigroup, also maintain optimistic ratings on the stock. The analyst consensus price target is near $1,495, suggesting roughly 60% potential upside.

Quarterly Results Support Analyst Optimism

Micron’s most recent quarterly results provided additional support for the bullish view. Fiscal third-quarter revenue reached an all-time high of $41.46 billion, up 346% from the same period a year earlier. Adjusted earnings per share were $25.11, compared with $1.91 in the prior-year quarter.

Free cash flow reached a record $18.3 billion, while operating cash flow totaled $25.39 billion.

Management guided for approximately $50 billion in fourth-quarter revenue and non-GAAP earnings per share of about $31.

Micron has also secured long-term supply partnerships with automotive industry customers, including Ford, General Motors, Qualcomm, Denso, Harman, and Visteon. Those agreements position the company to benefit from rising semiconductor content in vehicles as automakers add advanced driver-assistance systems, infotainment platforms, and connectivity features.

The coming week includes quarterly earnings reports from Microsoft on July 29 and Amazon on July 30. If either company reports elevated data center capital spending similar to Alphabet’s disclosure, memory semiconductor stocks may see additional momentum.

Wall Street analysts assign Micron a “Strong Buy” consensus rating.