Why Micron Technology Stock Skyrocketed 87.8% Last Month But Is Falling in June

Micron (NASDAQ: MU) stock posted a massive rally in May's trading. The company's share price surged 87.8% higher in a month that saw the S&P 500 gain 5.2% and the Nasdaq Composite jump 8.4%.

Micron has been on a huge rally this year thanks to a favorable demand outlook for memory chips used in artificial intelligence and data center applications. Even with a pullback in June's trading, the company's share price is up roughly 203% in 2026.

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Micron stock was red hot last month

AI stocks enjoyed very strong bullish momentum in May, and Micron saw massive gains as investors bet on continued wins in conjunction with artificial intelligence infrastructure buildouts. The company's memory chips have become favored components in advanced AI processors from Nvidia and other hardware leaders, and supply constraints have led to surging pricing power and skyrocketing margins.

In terms of business-specific news, last month was actually relatively sparse for Micron. The company announced that it had commenced 1-alpha DRAM manufacturing at its fabrication plant in Manassas, Virginia, but general bullish excitement surrounding AI memory stocks was the biggest driver for its valuation gains.

With the AI trade running red hot last month, Micron stock received a wide range of bullish coverage from analysts and a gamut of price-target hikes. The company's valuation crossed the $1 trillion mark for the first time last month, but it has seen a pullback in June's trading.

Why is Micron stock slipping this month?

On the heels of huge bullish momentum last month, AI stocks have recently been hit with some sell-offs. The market had a negative reaction to what looked like a pretty strong quarterly report from Broadcom, and macroeconomic concerns have caused investors' confidence in the AI trade to waver. As of this writing, Micron stock is down roughly 11% in June.

Last Friday, the Bureau of Labor Statistics (BLS) published its job numbers for May. The report estimated that 172,000 nonfarm payroll positions were added last month, crushing economists' forecast for additions of 80,000 positions in the period. Stronger-than-expected jobs growth can be viewed as a positive in some respects, but it could actually wind up causing pain for investors.

The Federal Reserve is tasked with both promoting economic growth and curtailing inflation -- two mandates that are often at odds with each other. Recent reports have suggested that inflation is accelerating again, and the trend could cause the Federal Reserve to raise interest rates in order to curb inflationary pressures.

If growth for jobs is looking relatively strong, members of the Federal Open Market Committee (FOMC) may wind up thinking that combatting inflation should take precedence over taking steps to foster economic activity. If the Fed were to vote to raise interest rates this year, it could hurt the bull rally for Micron and other AI stocks.

Keith Noonan has positions in Micron Technology. The Motley Fool has positions in and recommends Broadcom, Micron Technology, and Nvidia. The Motley Fool has a disclosure policy.