Why Micron Stock Suddenly Crashed
Key Points
South Korea's stock market just blew up on worries over leveraged bets on Samsung and SK Hynix.
Single-stock leveraged ETFs track Micron in the U.S., too.
Is Micron next to fall?
- 10 stocks we like better than Micron Technology ›
Did the AI memory chip bubble just burst? Shares of memory specialist Micron (NASDAQ: MU) collapsed Tuesday morning, falling 10% through 11:05 a.m. ET. And you can trace the origins of this sell-off straight to one place:
South Korea.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
Image source: Getty Images.
Big trouble in little Korea
Home to computer memory giants Samsung and SK Hynix, South Korea is the epicenter of money-making in the memory market. Problem is, gigantic profits earned on memory stocks this year have created a Korean stock market bubble, and it may have just popped.
Korea's Financial Supervisory Service (FSS) approved the creation of 16 "single-stock leveraged ETFs" in late May, all of which track Samsung and SK Hynix with 2x leveraged bets on the stocks' performance. When Samsung stock gains 1%, for example, the ETF that tracks it should gain 2% -- but when Samsung loses 1%, the losses would be magnified just as much.
Think that might make the stock market more volatile? Well, that's exactly what's happening today -- but at least it's happening with good intentions.
FSS Governor Lee Chan-jin says he wishes he had blocked the creation of these ultra-leveraged ETFs, which have tripled in size to more than $9 billion over the past few weeks, but are "high-risk products" bought primarily by individual investors gambling on market momentum. Today's warning attempted to cool things down -- but ignited a sell-off instead.
What this means for Micron
Similar concerns about ETFs leveraged to Micron may be adding to this stock's volatility today. Or investors may simply be questioning how much of the momentum that lifted Micron stock 847% in 52 weeks was investors buying Micron as an alternative to pricey Samsung and SK Hynix shares?
If the price rises in Korea were produced artificially, though -- maybe Micron stock didn't deserve all its gains, either.
Should you buy stock in Micron Technology right now?
Before you buy stock in Micron Technology, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Micron Technology wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $393,037!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,280,627!*
Now, it’s worth noting Stock Advisor’s total average return is 913% — a market-crushing outperformance compared to 208% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of June 23, 2026.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology. The Motley Fool has a disclosure policy.
Recommended Articles
