Founded by Ray Dalio, the world’s largest hedge fund of Bridgewater Associates executed one of its most decisive semiconductor exits during the second quarter. According to its latest 13F filing, the firm slashed its stake in Micron Technology (MU) by approximately 92%, selling roughly 1.36 million shares and retaining only about 110,000 to 117,000 shares.
Still, the filing should not automatically be interpreted as a bearish call on Micron’s business. The reduction came after Micron shares had already delivered one of the market’s most powerful runs of the year, climbing 225% year-to-date (YTD) through mid-August. That advance reflected surging demand for high-bandwidth memory and advanced DRAM tied to the AI buildout.
More Top Stocks Daily: Go behind Wall Street’s hottest headlines with Barchart’s Active Investor newsletter.
Therefore, Bridgewater’s dramatic reduction creates a more nuanced question for MU investors. Does Bridgewater’s massive reduction represent routine profit-taking after an extraordinary rally or a warning that Micron stock may be approaching a more difficult stage of the AI-driven memory cycle?
Micron’s Record Earnings
Based in Boise, Idaho, Micron is a $1.14 trillion U.S. semiconductor company that designs and manufactures memory and storage chips. Its DRAM, NAND flash, and high bandwidth memory products support data centers, AI systems, smartphones, PCs, vehicles, and industrial equipment worldwide.
MU is up 660.2% over the past 52 weeks and 32.8% over the last three months.
www.barchart.com Its 21.23 times trailing price-to-earnings ratio is below the sector median of 35.62 times, while its 11.72 times trailing price-to-sales ratio is well above the 3.73 times sector median. The stock also offers a $0.60 forward annual dividend, yielding 0.06%.
Micron reported fiscal Q3 2026 revenue of $41.46 billion, exceeding the $36.28 billion consensus estimate by 14.3% and rising 346% from a year earlier. Revenue also rose from $23.86 billion in the preceding quarter and $9.30 billion in the prior-year period.
This earnings momentum produced adjusted EPS of $25.11, surpassing the $19.66 consensus estimate by 27.7%. Its non-GAAP net income reached $28.86 billion, or $25.11 per diluted share.
The company generated $33.68 billion in adjusted operating income, beating the $25.4 billion expectation by 32.6%. That result translated into an 81.2% adjusted operating margin.
MU posted GAAP net income of $28.24 billion, equal to $24.67 per diluted share. Operating cash flow climbed to $45.7 billion, compared with $20.31 billion sequentially and $11.8 billion one year earlier.
Micron’s operating margin expanded to 80.4% from 23.3% a year ago. Free-cash-flow margin reached 44.2%, up from 18%, showing that higher memory pricing and product mix converted rapidly into cash generation.
Micron Expands Its AI and Supply-Chain Footprint
Micron Technology is widening its long-term AI strategy through new investments. On August 13, the company launched the Micron Ventures Paradigm Fund, a $250 million investment vehicle focused on companies shaping the next phase of artificial intelligence.
The Paradigm Fund is Micron Ventures’ third and largest fund, bringing the venture arm’s total capital commitments to $550 million. It will invest across four connected areas that could influence future memory and storage needs: model architecture, compute, enterprise applications, and physical AI.
And, Micron is locking in demand beyond data centers. The company signed a long-term Strategic Customer Agreement (SCA) with Ford Motor Company (F) on July 6 to strengthen memory and storage supply for Ford’s next-generation vehicle production.
Micron plans to increase output of critical automotive memory solutions through capacity expansions designed for extended product lifecycles. It is also expanding advanced DRAM production at its Manassas, Virginia fabrication facility to support automotive customers and localize supply.
On July 9, Micron announced plans to invest up to $3 billion to strengthen the U.S. semiconductor supply-chain ecosystem. The plan includes $500 million in strategic financing for GlobalWafers America’s 300mm raw silicon wafer facility in Sherman, Texas.
Together, these steps give Micron more exposure to future AI demand while strengthening its capacity to supply customers.
Wall Street Sees More Upside for MU Stock
Micron’s next earnings report, due September 22, will be a major test, as analysts expect $31.17 in adjusted EPS for the August 2026 quarter. That would represent a 989.86% increase from $2.86 in the prior-year quarter.
Micron’s management guided for Q3 CY2026 revenue of $50 billion at the midpoint. That forecast exceeds the $43.68 billion analyst consensus estimate by $6.32 billion. The company also expects adjusted EPS of $31 at the midpoint, $7.54 above the $23.46 consensus estimate.
New Street Research lifted its rating on Micron to “Buy” and set a $1,250 target price. The firm believes sustained AI-related memory demand could reduce the severity of Micron’s traditional boom-and-bust cycles. It also projects that Micron’s market value could reach $2 trillion to $3 trillion by 2030.
The broader analyst consensus remains firmly constructive, although estimates embed substantial execution expectations. MU carries a consensus “Strong Buy” rating from 41 analysts. The average price target stands at $1,482.40, a 57.6% upside from MU’s August 18 closing price.
www.barchart.com 
www.barchart.com Conclusion
Bridgewater’s Q2 sale looks more like profit-taking than a clear warning on Micron’s fundamentals. MU still benefits from powerful AI memory demand, improving pricing, and guidance that sits well above Wall Street expectations. The shares are likely to trend higher over time if Micron meets its $50 billion revenue outlook. Still, investors should expect sharp moves around earnings because the stock already reflects huge optimism.
On the date of publication, Ebube Jones did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
More news from Barchart
MRVL Stock Alert: What to Know as Marvell Technology Expands Chip Deal With Google Bridgewater Dramatically Trimmed Its Position in Micron During Q2. What This Means for MU Stock. Here Is How to Play Tesla Stock After Its Robotaxi Breakthrough Morgan Stanley Just Upgraded Honeywell Aerospace Stock. Here's Why.