3 weeks ago
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Anthony Di Pizio, The Motley Fool
Sun, August 2, 2026 astatine 12:45 PM CDT 5 min read
Micron Technology (NASDAQ: MU) is 1 of the world's apical suppliers of high-bandwidth representation (HBM) for information centers, which helps maximize processing speeds successful artificial quality (AI) workloads. Demand for this hardware is disconnected the charts, resulting successful a terrible shortage that is giving Micron the quality to dictate prices.
But contempt these favorable conditions, Micron banal precocious plummeted by 32% from its June grounds high. Concerns are increasing astir the sustainability of the AI infrastructure spending boom, arsenic the soaring outgo of chips and components threatens the fiscal viability of deploying AI software.
Missed Nvidia successful 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" awesome flashed for a little-known chipmaker called Nvidia. For the archetypal clip successful years, that aforesaid "Total Conviction" awesome is flashing for a institution 1/100th the size of Nvidia. Continue »
To support things successful perspective, Micron banal is inactive sitting connected a one-year summation of astir 700%, truthful the entity isn't precisely falling conscionable yet. But here's wherefore I won't beryllium buying the caller dip.
Why Micron banal is sinking
According to a forecast by Bloomberg, determination volition beryllium astir 118 gigawatts' worthy of information halfway capableness installed crossed the U.S. by 2030 to enactment the AI boom. Nvidia CEO Jensen Huang says gathering a azygous gigawatt worthy of capableness requires $50 cardinal worthy of superior investment, truthful if Bloomberg's forecast proves to beryllium accurate, America's tech giants volition person spent a staggering $5.9 trillion by 2030.
Those companies person to make a instrumentality connected each of that superior spending, different it wouldn't marque economical sense. Some of them volition execute this by renting computing capableness to different businesses for a fee, portion others volition complaint for the usage of their AI models and bundle applications. But arsenic hardware prices proceed to soar, AI companies person to complaint their customers much money, and it's rapidly becoming unsustainable.
Microsoft and Anthropic precocious implemented terms increases for immoderate of their AI bundle products, with concerning results. For example, Uber Technologies burned done its full 2026 AI fund successful conscionable 4 months by utilizing Anthropic's Claude Code, and the company's main operating serviceman said it's becoming hard to warrant the existent complaint of spending.
Amazon and Walmart precocious joined Uber successful capping AI usage for their employees to forestall further fund blowouts. But they aren't alone, due to the fact that a survey by UBS Group recovered that 60% of businesses are present routing tasks to cheaper, much businesslike AI models to assistance trim costs.
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