The stock has a history of collapsing by 50% to 98% after every spike, regularly falling below its Dotcom Bubble high. But this time is different?
By Wolf Richter for WOLF STREET.
The stock of memory chip maker Micron Technology has a history of fantastical mania spikes that then collapse. So now there’s another fantastical mania spike, but it’s an AI mania spike, and everything else pales compared to it. Since the low of April 3, 2025, Micron’s stock [MU] exploded by 1,315%, and its market capitalization exploded from $72 billion to $1.01 trillion. Over the past 12 months, shares exploded by 854%. Yesterday, they spiked by 19%. Today, they’re up about 2% at the moment, at $916 a share.
But for Micron, spikes have invariably been followed by collapses. For example, from September 1995 to July 1996, the stock collapsed by 82%; and from Micron’s Dotcom Bubble’s peak in July 2000 ($95.13) to December 2008, so in about 8 years, it collapsed by 98% to $1.85, most of which in the first two years. There were numerous spikes followed by post-spike plunges of 50% or more. But it took the shares 18 years (till March 2018) to exceed the Dotcom Bubble high for the first time, and then shares plunged 50% again, well below the Dotcom Bubble high.
The Dotcom Bubble high wasn’t seen again until mid-2020; the stock continued to surge until mid-January 2022, but then plunged by 50%, once again below the Dotcom Bubble high. And the stock plunged by 58% again between June 2024 and April 2025, to $64.72, which was 32% below its Dotcom Bubble high 25 years earlier. At each spike along the way, it was: “This time it’s different,” and it was never different. But nothing compares to the current AI mania spike.
Trump was helping along the way. On Friday, he said at a rally, “Boy, Micron is great.”
In terms of market cap, Micron’s path to a $1 trillion stock from a $500 billion stock broke all records: only 48 trading days to reel in the second $500 billion after the stock hit $500 billion in market cap for the first time on March 17.
And we know: “This time it’s different,” and this time it is different because the amounts of dollars involved – they’re no longer tens of billions, but a trillion this time.
In terms of speed from $500 billion to $1 trillion, that 48 trading days was by far a record. Nvidia, the poster boy for this sort of stuff, took 490 trading days to get there. Nvidia is now a $5 trillion company.
There weren’t any US companies with a market cap of $1 trillion before 2023. Now there are 12 US companies, including Micron.
There is no telling how much further this AI mania will go, and what new crazy thing will happen next, and there is no telling which of these stocks will tank first by 50%-plus.
When this stuff goes up in smoke once again, some serious dollars will vanish. Even a minor drawdown of 10% of these 12 stocks combined incinerates trillions of dollars of imagined value that then becomes unimagined.
But investors are spread around the world as the entire world has piled into these few stocks to get rich quick, and they got rich quick, and when the AI stock mania deflates, as all manias eventually do, the damage will be spread around the world too. But wait, no, this time it’s different….
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Thank you for your article. One observation, however, is that the new artificial intelligence revolution has an enormous demand for Micron’s product. As long as the hyperscalers keep forking over all their cash in order to build out AI infrastructure, Micron stands to benefit. The company seems to be in a very rare situation of having suddenly become one of the most important corporations on this planet. It was always important, but this time, it is making the thing the big technology players need most. Besides of course, water and electricity itself… moreover, relative to future earnings, the stock seems to be still heavily undervalued. And, if the company keeps delivering and executing like it has, there is no reason to believe that their forecasts and projections are inaccurate.
So, until demand begin softening, they lose pricing power, their margins suffer, or they become too richly valued, Micron seems to have earned its rightful place in this market.
Yes, this time it’s different!
💔
It is. “Trust me.”
I’m serious, actually. There’s a reason MU has hopped so much so fast. It’s a healthy freaking company with unfathomable demand. Yeah, it’s cyclical, but after going up a bazillion percent, we can afford a nasty 50% drop after 5 years or so.
Same with the “housing bubble” that turned out to not actually be a bubble.
Your audience craves pessimism and you deliver the product very well, I think. No offense intended. Just observing from my standpoint.
Look at MU’s history, which is what this article is about. I lived through the Dotcom Bust when MU lost 98% of its value.
Memory chips are commodities, whose prices surge and collapse, which is why MU is so cyclical. And then Micron has billions of dollars in net losses. It lost $6 billion in 2023, which is what happens when memory chip prices drop again, as they always do eventually.
AI will go down as the worst investment tool ever. Open AI walked back everything they claimed would never happen. Chat gpt for dummies all at the expense of the common folk. Now, open AI has monthly payment plans with ads. Privacy is nothing today given how open AI showed its consumer. It won’t be too long companies scale back (if they haven’t already) their AI ambitions.
Tulipmania! I know but I cannot forego trading on this stuff daily. Been a very good few month$. Keeping a good dose of powder and some diversification just in case.
You all around here said BTC was tulip crap for like 10 years and look how it has been doing. I was on board but the stuff has gone institutional. Yeah, it is in my opinion a failed currency disguised as a strangely volatile “stored of value”, but there is no tulipmania and the same goes for AI.
It’s as if Micron found the cure for cancer. The bubble popping can’t happen soon enough so that we get the cure for all the collective hopium poisoning.
This won’t be Micron’s last cycle. The sheer volume of AI buildout demands upgraded parts every few years for many years to come, much like PCs did back in the good ole days. The infrastructure costs of AI dwarfs the PC and internet buildouts.
I agree. It’s permanent infrastructure. AI will pervade virtually every area of our lives in 10 years. We’ll say “How did we ever live without AI?” like we do now about the Internet. Electricity. The wheel.
MU, SNDK, Samsung… will moderate production to keep memory prices up whenever necessary. Why wouldn’t they? Yeah, it’ll be a jerk thing to do but who will stop them? Today’s stock market (and housing market) is different than 25 years ago.
It’s for the rich to get richer and somehow us normal folks get a little invitation.