Micron (MU) shares fell 7% on Friday, giving back part of Thursday’s 3.2% gain, while SK Hynix’s American depositary receipts dropped 8.8% after rising 2.6% in the previous session. Despite the Friday decline, Micron remained up about 6% for the week after gaining in three of the past five trading sessions.

The pullback followed a difficult month for major memory-chip names. Micron is down 12.8% over the past 30 days, while SK Hynix’s Seoul-listed shares have lost nearly a third of their value during the same period.

Concerns about the sustainability of chip pricing have continued to weigh on the sector. Memory markets are historically cyclical, with pricing tied to supply discipline, inventory levels, and demand from end markets such as data centers, PCs, smartphones, and autos. Those worries have not fully eased, even after both stocks rebounded earlier in the week.

Alphabet’s earnings provided one positive data point for memory companies, showing continued growth in data center spending. AI servers require large amounts of advanced memory, including high-bandwidth memory used alongside accelerators and DDR memory and NAND storage used across data center systems. Although Alphabet shares suffered their largest single-day market-capitalization loss on record, the company’s data center spending outlook helped support memory stocks heading into the end of the week.

Bank of America Maintains Buy Rating

Bank of America reiterated its Buy rating on Micron this week and kept a $1,550 price target, implying roughly 65% upside from current levels.

The bank pushed back against concerns that China’s Kimi K3 AI model could reduce spending on AI infrastructure. Bank of America argued that more efficient AI models could instead increase demand for high-bandwidth memory, or HBM, as well as DDR5 and NAND storage.

Bank of America also said open-weight AI could expand Micron’s addressable market by drawing in thousands of enterprises that may run AI models on their own hardware rather than depending on a small group of large hyperscalers. That argument matters for memory suppliers because broader on-premise AI adoption would add another source of demand beyond cloud service providers, though spending patterns would still depend on enterprise deployment plans and hardware availability.

Micron currently trades at about 21.5 times trailing earnings and 13.1 times forward earnings, below the broader semiconductor average. Other firms, including KeyBanc, TD Cowen, Bernstein, and Citigroup, also carry bullish ratings on the stock. The consensus price target is around $1,495, suggesting roughly 60% upside.

Quarterly Results Support the Bullish Case

Micron’s latest quarterly results gave bullish analysts additional support for their view. Fiscal third-quarter revenue reached a record $41.46 billion, up 346% year over year. Adjusted earnings per share were $25.11, compared with $1.91 in the same quarter a year earlier.

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

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

Micron has also secured long-term supply agreements with automotive customers including Ford, General Motors, Qualcomm, Denso, Harman, and Visteon. Automotive contracts are relevant because vehicles increasingly use memory for infotainment, driver-assistance systems, connectivity, and other electronics, providing a demand stream outside the most closely watched AI data center market.

Investor attention will next turn to earnings from Microsoft on July 29 and Amazon on July 30. If either company signals higher data center spending, as Alphabet did, memory stocks could receive further support. Commentary on AI infrastructure budgets, server demand, and customer inventory levels will be closely watched alongside Micron’s own guidance.

Micron carries a “Strong Buy” consensus rating on Wall Street.