Micron Technology shares dropped sharply again on Monday as worries about possible cuts in AI infrastructure spending resurfaced. However, there is still no solid proof that a slowdown is actually happening.
The stock fell almost 6% in early trading, adding to last week’s losses and putting it on track to lose all of its September gains. Shares of SK Hynix, a South Korean competitor, dropped by a similar amount.
Micron has always been a volatile stock, rising more than six times in the past year. It often reacts strongly to any hint that AI spending might slow down. The latest drop followed comments from leaders at Anthropic, OpenAI, and SpaceX over the weekend, who said the pace of AI development should slow.
A slowdown in AI development would have a big impact on the memory chip market. Demand for AI hardware has already caused supply shortages and pushed prices higher. UBS estimates that about 90% of a nearly $1 trillion increase in AI capital spending from 2025 to 2027 will go to memory-related costs. If AI development really pauses, much of that spending could be at risk.
UBS now expects AI capital spending to reach almost $1 trillion this year and about $1.4 trillion by 2027. A bigger share of this money is going to memory costs, reflecting the sharp rise in memory prices this year and more increases expected next year.
Right now, there is little solid evidence that data-center construction is slowing down. The main development has been Anthropic’s decision to let third-party evaluators review its AI systems. At the same time, the company is moving ahead with plans for a possible public listing that could value it at about $2 trillion, which does not suggest that AI investment is slowing.
The CEO and chief investment officer of Laffer Tengler Investments said she is using the recent drop as a chance to buy more Micron shares. She believes the backlog of AI projects is still strong, with data centers still being built in ways that should support growth for a while. She added that the market’s worry is really about what might happen in two or three years, but she expects the current AI buildout to be part of a major technological shift.
So far, the Trump administration is still backing the expansion of data centers, and no major AI company leader has said they will cut capital spending. Right now, a bigger concern for markets may be higher borrowing costs, as investors wait for a possible Federal Reserve interest rate decision this week.
Micron has faced similar worries about AI spending before, and for now, this latest drop seems to be another example of its usual volatility, not a sign of a major change.
