This Tuesday, global stock markets experienced severe turbulence, with AI computing infrastructure-related stocks that have led the market rally this year plunging collectively, triggering panic selling in a “Black Tuesday.” U.S. equity markets also came under pressure, with the Nasdaq 100 Index tumbling 3.3% and the Philadelphia Semiconductor Index sliding approximately 8%, while defensive sectors such as consumer staples, REITs, healthcare, and utilities bucked the trend and rose.
In this sell-off, storage chip giant Micron Technology (MU) plunged more than 13% in a single day, closing at approximately $105.1, though year-to-date gains still stand at an impressive 270%. Market attention is now firmly fixed on the quarterly earnings report scheduled for Wednesday Eastern Time (Thursday morning Beijing time), which is viewed as a critical test of whether AI infrastructure spending can support current elevated valuations.
The sharp volatility in Micron’s stock price has not deterred the options market. At-the-money straddle data indicates that by Friday options expiration, the stock’s implied movement is roughly $13.9, equivalent to a swing of about 13% from the current price. Specifically, the 105 straddle is valued at approximately $13.94 at mid-market, while the 106 and 107 straddles are both priced slightly above $13.9, leading the options market to broadly price in a post-earnings trading range near $92 to $120. Given the stock’s substantial pullback heading into the report, this wide range is particularly noteworthy.
On the call side, strong interest persists, with the 110 call seeing over 11,000 contracts traded and the 120 call approaching 10,000 contracts, while open interest in the 105 call stands at 16,500 contracts, making this strike one of the most critical levels on the options chain. The put side is equally active, with the 100 put seeing more than 5,500 contracts traded and open interest exceeding 8,400 contracts, and the 105 put recording nearly 4,000 contracts traded. In the recent sell-off, put premiums have surged, with at-the-money puts in the 105 to 107 strike range rising approximately 180% or more, indicating that while the market maintains a bullish tone, it is also actively hedging against further downside should results fall short of expectations or guidance prove weak.
For the third fiscal quarter, Wall Street analysts consensus estimates project Micron earnings per share of approximately $2.057 and revenue of about $35.25 billion, representing year-over-year growth of 1,000% and 279%, respectively. Over the past two years, Micron has beaten analyst expectations for both quarterly revenue and EPS in every single quarter.
Citi recently raised its Micron price target significantly, from $84 to $120, maintaining a “Buy” rating with an increase of 40%. At the same time, Citi raised its EPS estimates for fiscal 2026 and 2027 by 4% and 10%, respectively, with the fiscal 2027 EPS forecast reaching $11.473, approximately 4% above consensus. Citi projects Micron’s fiscal 2026 revenue at $115 billion, further rising to $197.5 billion in fiscal 2027, with gross margins expanding sharply from 39.8% in fiscal 2025 to 76.9%, and reaching 82.9% in fiscal 2027. Citi analysts noted that the pricing outlook for DRAM and NAND memory chips is more optimistic, and that rising memory prices have a significant leverage effect on Micron’s profitability.
Whether it is Google’s TPU computing clusters or Nvidia’s GPU clusters, both require full integration of HBM memory systems, coupled with data centers’ large-scale procurement of server-grade DDR5 and enterprise SSDs. The three giants—Samsung Electronics, SK Hynix, and Micron Technology—are simultaneously positioned across the three core areas of HBM, high-performance DRAM, and high-end data center SSDs, making them the most direct beneficiaries of the AI infrastructure wave. Both Citi and Goldman Sachs believe that the AI computing arms race led by cloud giants is transforming memory chips from cyclical commodities into scarce strategic assets, and that DRAM and NAND price hikes in 2026 may represent only the initial phase of a super-cycle.
