MU Stock and DRAM ETF Show Why Demand for AI Memory Still Matters After Selloff

Investors are creatures of habit. They are influenced by moral capital, and their decisions are often driven by psychological factors, emotions, and cognitive biases. The result: a choice that may, in retrospect, be regretted.

That decision-making was on full display last week, as fear-driven semiconductor sales wiped out $2.7 trillion in market capitalization from some of last year’s biggest winners.

But what we have learned is that those fears—justified or not—have been seen before. And time and time again, retailers are left behind as the technology sector takes a back seat.

The truth is that despite a series of all-time highs in major indexes, triple-digit gains in AI-backed stocks, and a circular funding pattern, the structural assembly in memory chip makers remains the same.

Why Chip Stocks Are Selling Off Despite Strong Demand for AI

Market naysayers have been looking for the next bubble ever since the last one burst. But the ongoing AI-driven bull market is nothing like the dot-com crash, which was characterized by wild valuations, wildly hot prices, and a prioritization of growth over profitability.

Instead, the so-called AI bubble has proven to be multidimensional and pops. And like any price rally, the recent pullback in chip stocks was less a sign of a more expansive market than part of a healthy market cycle.

Still, jittery investors dumped shares amid concerns about rising hardware installation costs, debt utilization, and ballooning CapEx.

an apple NASDAQ: AAPLfor example, the recently announced price increase for Macs and iPads, which directly points to those increases due to memory chip shortages.

Gaming hardware is also feeling the pressure. Microsoft NASDAQ: MSFT raised its prices for the XBOX console, along with Nintendo OTCMKTS: NTDOY showed similar difficulty with the Switch 2 price increase set to go into effect on September 1.

CapEx is another concern. A perceived conflict between the use of hyperscalers and the production of memory providers has emerged, with investors concerned about a potential lack of return on investment.

In total, the four largest hyperscalers—Alphabet NASDAQ: GOOGLAmazon NASDAQ: AMZNMeta Platforms NASDAQ: METAand Microsoft—on track to reach more than $700 billion in CapEx this year. But Wall Street isn’t sure that that spending will come from earnings.

Analysts doubt that those subsidies will lead to near-term, high-profit revenue, since those companies aren’t just paying for more hardware; they pay very high prices. For example, during its Q3 FY2026 earnings call, Microsoft CFO Amy Hood disclosed that $25 billion of the $190 billion CapEx is driven by inflation rather than new capacity.

Still, even though billions were wiped off memory chip market caps in June, the PHLX Semiconductor Index remains up 11% last month, about 99% year to date, and 157% over the past year. Since the deficit is forecast to last at least until 2028 while enjoying a compound annual growth rate of 11.6% to 2030, the latest postponement has proven to be an adjustment to the balance rather than a long-term demand slump.

Proof in the Pudding for Micron and the Roundhill Memory ETF

In the first half of 2025, Micron Technology NASDAQ: MU it was a little known name. In Q1 FY2025, the market cap was just over $108 billion. Today, the company’s market value is estimated at $1.2 trillion, making it the 12th largest US-listed company.

Micron has gained more than 200% year to date and more than 750% in the last 52 weeks. The company has never missed an earnings call since Q2 FY2023, and year-over-year earnings growth in Q3 FY2026 was over 1,358%.

Still, the stock carries a consensus rating of Buy, a 12-month price target of more than 20% from current prices, and Micron announced gross margins of nearly 85% and earnings per share of $25.11 when it reported Q3 results on June 24.

Importantly, during its earnings call, the company said it has signed 16 strategic customer agreements covering data center, consumer, automotive, and other markets, which it believes will transform its business model, showing that demand is not only driven by hyperscalers.

Meanwhile, one thematic exchange-traded fund (ETF) continues to prove the June panic traders wrong.

Roundhill Memory ETF today

DRAM

Roundhill Memory ETF

$65.86 -7.99 (-10.82%)

As of 07/1/2026 04:10 PM Eastern

52 week interval

$26.14

▼

$81.34

Assets Under Administration

$25.91 billion

Less than two weeks after making its debut, MarketBeat profiled the Roundhill Memory ETF BATS: DRAM.

The ETF is specifically designed to provide targeted exposure to the memory chip industry.

Since its launch on April 2, the fund has gained more than 130% despite the recent and massive sell-off.

Contextually, during the same period, Alphabet—the top seven player—gained less than 21%, underscoring the raw growth potential of memory chip makers, the ETFs that track them, and the individual and semiconductor stocks in their basket.

DRAM is owned by Micron, SK Hynix (which recently filed for its NASDAQ IPO), and Samsung OTCMKTS: SSNLFwhere he joined the three newest members of the billionaire market club. Icing on the cake, the ETF also owns Sandisk NASDAQ: SNDKWestern Digital NASDAQ: WDCand Seagate Technology NASDAQ: STX.

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