Micron Technology is crushing expectations to a degree that's reminiscent of Nvidia's breakout performances at the beginning of the artificial-intelligence boom three years ago, a Deutsche Bank analyst noted.

But its stock $(MU)$ fell 4% on Thursday despite the company's latest blowout earnings report, which saw Micron offer a $19.15 forecast for quarterly adjusted earnings per share at the midpoint, well above the $12.03 analysts had been expecting for the May period.

Deutsche Bank's Melissa Weathers attributed the move to growing fears among investors that the memory cycle is close to a peak. Micron's stock is up 335% over the past year, a rally that already factors in enthusiasm around AI-driven memory-chip shortages that have allowed companies to raise prices.

Investors might be getting more wary now, particularly after Micron raised its capital-expenditure guidance for fiscal 2026 to $25 billion from $20 billion and said that it expects that spending to "step up meaningfully" in fiscal 2027. While revenue growth is on a tear, coming in at about 196% in the latest quarter, Micron needs to invest heavily in its dynamic random-access memory and NAND businesses.

"We see this cyclical caution from investors as prudent given past memory bust cycles," Weathers said in her note, adding that the more cautious view "is difficult to disprove in the near term" as investors question the duration of the memory boom. Even so, she personally believes that concerns about an imminent memory-market peak "are immature."

Mizuho trading-desk analyst Jordan Klein said investors are likely cautious because they "have never really seen margins this high in the sector." Micron is guiding for an 81% gross margin in the current quarter, and Klein said bulls see room for margins to come in even higher than that, reflecting a view that the current cycle is different and that dynamic random-access memory is no longer a commodity product.

In his view, Micron's stock selloff Thursday "is not a great sign" in light of the company's strong guidance, but Klein said he wouldn't use the fall "as the true measure of who [is] winning the bull vs. bear debate."

"All that matters" is when the actual peak in the memory cycle comes, Klein said in a note to investors, adding that that could be late next year or in early 2028. If that's the case, Klein said analysts will ultimately start reducing Micron estimates and investors will be selling the stock months ahead of when those lower numbers manifest in the actual reports, leaving "maybe 12 months of upside" for now.

On the other hand, Morgan Stanley analyst Joseph Moore said Micron's "numbers may seem 'too good'" to some investors, helping to explain Thursday's stock declines.

But looking to past cycles for signs of when to start selling the stock "misses the point," Moore said in a note, as outsize AI spending is expected to continue. In his view, investors should expect Micron to keep its earnings power as long as AI spending goes higher.

In the last two quarters, Micron has shown that its "near-term leverage is quite a bit better" than that of Nvidia (NVDA) and other AI chip stocks that have been stuck in a rut over AI spending fears.