Short Sellers Increase Bets Against Micron Technology Amid AI Rally

Short interest in Micron Technology has risen to approximately 37.3 million shares, representing 3.32% of the public float, as bearish investors wager that the semiconductor rally is overheating. This increase in short positions contrasts with Micron’s strong financial performance, driven by high demand for high-bandwidth memory chips for artificial intelligence. Despite the stock reaching a 52-week high of $818.67 and posting significant year-over-year revenue and profit growth, short sellers cite concerns over aggressive valuations, potential future oversupply, and high capital spending.

The surge in bearish positioning follows a steady climb throughout 2026, with short interest jumping 15.9% in early April and rising a further 2.6% in late April. This activity occurs despite Micron reporting record financial results for fiscal second quarter 2026, where revenue surged 196.4% year-on-year to $23.9 billion, driven by high demand for high-bandwidth memory chips for artificial intelligence. The stock recently reached a new 52-week high of $818.67 on May 11, with year-to-date gains of 168.3% and a 12-month surge of 707.4%.

Micron’s fiscal second quarter 2026 results highlighted the intensity of the AI boom, with adjusted earnings per share reaching $12.20, up roughly 682.1% year-over-year from $1.56 in the same period last year. Management issued strong guidance for fiscal Q3 2026, expecting revenue of around $33.5 billion and EPS of $19.15. The Cloud Memory Business Unit generated $7.8 billion in revenue, while the Core Data Center Business Unit saw revenue rise to $5.7 billion, with gross margins expanding significantly across key segments.

Despite the bullish momentum, short sellers argue the rally may be overheating, citing concerns over aggressive valuations, potential future oversupply in the memory market, and Micron’s expanding capital spending plans. The stock trades at 12.66 times forward earnings, which is described as a discount compared to industry peers, with a consensus price target of $628.20 and a high target of $1,100. This valuation gap has created a tug-of-war between momentum investors betting the AI cycle is still in its early stages and short sellers wagering that semiconductor enthusiasm has simply gone too far, too fast.

Analyst consensus remains strongly bullish, with 31 analysts rating it a “Strong Buy,” five a “Moderate Buy,” and five a “Hold.” Major firms have adjusted their outlooks upward, with Mizuho raising its price target to $800 from $740, and BofA Securities raising its target to $950 from $500, both maintaining positive ratings. These upgrades reflect continued confidence in AI-driven memory demand and tight industry supply conditions, even as bearish bets accumulate against the stock.