Over the past month, Micron Technology (MU) shares have fallen approximately 29% from their recent peak. However, the memory chip giant’s fundamentals have shown no signs of cracking — the explosive growth in AI computing demand continues unabated, and a recent industry development has precisely confirmed this trend.
Kimi AI’s “Turning Away Customers” Event Validates Computing Power Shortage
In mid-July, Chinese AI company Moonshot AI’s large language model product, Kimi AI, announced on social platform X that it had temporarily stopped accepting new customers due to exhausted available computing resources, a decision made to “protect the experience of existing subscribers.” This move vividly illustrates the acute tension in AI computing supply.
Kimi AI’s architecture is similar to OpenAI’s ChatGPT — every instruction entered by users and every task performed by AI agents requires GPU computing power, and the efficient operation of GPUs relies on high-bandwidth memory chips. The Kimi AI case is not an isolated incident — it demonstrates that against the backdrop of parabolic growth in AI demand, computing capacity gaps are becoming a widespread industry bottleneck. Other companies with larger GPU reserves or those that have prepared in advance, in order to avoid being forced to turn away customers amid surging demand, will inevitably further increase investment in computing infrastructure — and every dollar of that investment will translate into incremental purchases of Micron’s memory chips.
Valuation Has Dropped to Rarely Seen Historical Lows
Following the share price correction, Micron’s valuation metrics have entered a highly attractive range. As of July 21, Micron’s forward price-to-earnings ratio stood at just 5.5 times, compared with approximately 15 times at the end of 2025. Even if the stock rallies sharply again, given the explosive growth in the company’s revenue and profits, this low valuation level could still persist or even compress further.
The financial data speaks for itself. In the most recent quarter, Micron’s revenue more than tripled year over year (exceeding 300%), with gross margins approaching 70%. The continuation of strong sequential growth indicates that this is not a one-time spike but rather a structural shift driven by AI. Micron embodies the dual characteristics of a value stock (low valuation) and a growth stock (high growth).
Correction Culprit: Sentiment, Not Fundamentals
The broader AI sector has come under pressure recently, and Micron’s decline is not an isolated phenomenon. Market analysis suggests that this pullback has been primarily driven by two emotional factors: concerns that AI investment may be overheating and a potential pullback, as well as selling pressure triggered by the unwinding of leveraged positions. However, none of these factors are related to the company’s actual operating performance or demand outlook.
Once market sentiment returns to rationality and fundamentals reassert their dominance in pricing logic, Micron is well-positioned for a new round of recovery. In an era where the AI computing arms race is far from over, the long-term narrative of this memory chip leader remains intact — and the short-term panic may well provide the entry window that investors have been waiting for.
