Just two days after the celebration of AMD joining the $1 trillion club, chip stocks wobbled again. Why are Micron's earnings next week so important?
2026-09-24
The causal mechanism: why the $1 trillion celebration faltered within two days
On September 21, AMD surpassed $1 trillion in market cap, becoming the fourth member of the "$1 trillion club" after Nvidia, Broadcom and Micron. It was the result of a roughly 173% surge year-to-date (Yahoo Finance, 2026-09-21). But two days later, on September 23, SK Hynix, ASML and AMD all fell more than 2% (compiled from related reports, 2026-09-23). The "chip stocks pulling back in tandem on AI executives' remarks about slowing the pace" highlighted in today's report is this very reversal within two days.
Beneath the surface: Michael Burry expands his short
One specific source of this wobble is Michael Burry. He took a short position in Micron at around $1,052 a share and rolled his QQQ put options over to June 2027 contracts, enlarging his bet (Yahoo Finance, 2026-09). His logic is simple — "memory has historically been cyclical, and the current narrative is ignoring that." In a September Substack post, citing remarks by Acer CEO Jason Chen — the observation that memory inventories are building and Chinese suppliers are releasing supply — he reaffirmed his view that "the current shortage of general memory was artificially created by manufacturers shifting production lines to HBM" (Yahoo Finance, 2026-09).
But consensus is the exact opposite
Despite Burry's warning, 40 of 45 analysts covering Micron maintain buy ratings, and the consensus price target is $1,502 (Yahoo Finance, 2026-09) — about 37% above Micron's (MU) close of $1,096.16 per the signal data. Goldman Sachs expects DRAM demand to exceed supply by 5% in 2026 and the gap to widen to 5.9% in 2027, and believes the excess demand won't be easily resolved because new fabs won't enter mass production until 2029 (Yahoo Finance·Motley Fool, 2026-09).
Why Micron's September 30 earnings are decisive
The first venue to test this clash with hard data is Micron's fiscal fourth-quarter earnings on September 30. Consensus expects revenue of $50.8 billion (above guidance of about $50 billion, +350% year-over-year) and non-GAAP EPS of $31.28 (+932% year-over-year) (Motley Fool·Yahoo Finance, 2026-09). The key is not the headline numbers but next quarter's guidance — even the slightest sign of slowing growth or margin pressure could trigger selling (Yahoo Finance, 2026-09).
SMH and MU through the signal data: already recovering quickly
Here are the last five trading days for SMH (semiconductor ETF, thematic group, -20% stop threshold) based on strategy signal history (latest update as of 2026-09-22).
| Date | Close | MA10 | MA50 | MA150 | Drawdown from Peak | Trailing Buffer | entry_ok |
|---|---|---|---|---|---|---|---|
| 09-15 | $542.11 | $557.57 | $566.84 | $519.56 | -19.31% | 0.69%p | False |
| 09-17 | $560.61 | $558.62 | $565.48 | $521.47 | -16.55% | 3.45%p | False |
| 09-18 | $573.00 | $560.66 | $564.78 | $522.58 | -14.71% | 5.29%p | True |
| 09-21 | $596.03 | $563.56 | $564.48 | $523.84 | -11.28% | 8.72%p | True |
| 09-22 | $607.46 | $566.94 | $564.92 | $525.17 | -9.58% | 10.42%p | True |
Micron (MU, mega_cap group, -30% stop threshold) over the same period:
| Date | Close | MA10 | MA50 | MA150 | Drawdown from Peak | Trailing Buffer | entry_ok |
|---|---|---|---|---|---|---|---|
| 09-15 | $927.60 | $969.66 | $926.44 | $733.02 | -26.08% | 3.92%p | True |
| 09-17 | $977.50 | $971.11 | $926.77 | $740.50 | -22.10% | 7.90%p | True |
| 09-18 | $1,015.80 | $976.88 | $927.26 | $744.51 | -19.05% | 10.95%p | True |
| 09-21 | $1,043.96 | $979.61 | $928.55 | $748.73 | -16.80% | 13.20%p | True |
| 09-22 | $1,096.16 | $989.20 | $931.73 | $753.37 | -12.64% | 17.36%p | True |
Both SMH and MU quickly exited the risk tier on 9/14-15 and currently meet the entry condition (entry_ok). This means that, contrary to Burry's pessimism, the trend-following system still trusts this rally.
Historical precedent: inventory signals always come before earnings
The memory cycle showed the same pattern in 2022-2023 — right after record results in fiscal 2022 (net income of $8.7 billion), Micron's revenue plunged 49% in fiscal 2023 and it swung to a $5.8 billion net loss. Back then, too, inventory warnings from distributors and customers came months ahead of official earnings. Whether the Acer CEO's remarks cited by Burry are the same kind of leading signal, or noise that doesn't apply in this cycle of long-term contracts and stronger capital discipline, is the real issue for the 9/30 earnings.
So what should investors do?
Don't treat AMD joining the $1 trillion club as a signal to buy more in itself. After a 173% rise year-to-date, the valuation burden is heavy. Check references to inventory and pricing in Micron's 9/30 guidance first — if signs of rising inventory or slowing prices are confirmed, the Burry scenario gains weight. The fact that entry_ok is True for both SMH and MU and their trailing buffers are recovering quickly means the short-term trend is still valid, but in the face of the single event risk of Micron's earnings, holding existing positions and confirming the results is more sensible than increasing exposure.
Detailed charts and signals for other stocks are available on the /signals dashboard.