Micron Shares Drop on Semiconductor Selloff Ahead of Nvidia

Micron Technology shares fell about 5.5% during a broad semiconductor selloff tied to traders de-risking ahead of Nvidia fiscal 2027 results, according to finance.yahoo.com. Investors also reacted to Bloomberg reporting possible server price increases above 15% for AI-equipped systems, finance.yahoo.com.

Semiconductor stocks broadly declined as profit taking followed gains earlier in the year, finance.yahoo.com. The article cited declines of about 3% to 5% across Intel, Advanced Micro Devices, and Taiwan Semiconductor Manufacturing Company, finance.yahoo.com.

Finance.yahoo.com said investors viewed Nvidia’s earnings and forward guidance as setting expectations for the broader technology hardware industry. It also cited a defensive shift across the supply chain as a key reason for the declines, finance.yahoo.com.

Micron’s stock dropped 5.5% in the same session, finance.yahoo.com. The piece listed Seagate down 5.7%, Western Digital down 5.5%, Semtech down 3.9%, and Penguin Solutions down 3.2%, finance.yahoo.com.

Finance.yahoo.com noted Seagate’s shares had 64 moves greater than 5% over the prior year, describing the day’s move as meaningful but not perceived as fundamentally changing its business outlook, finance.yahoo.com.

Finance.yahoo.com also referenced a CNBC report where Deutsche Bank’s Jim Reid warned that a lack of progress on a U.S.-Iran deal could extend the Strait of Hormuz closure and keep oil higher. The article said higher oil and rates can weigh on chip stocks by raising the discount rate and financing costs tied to data-center buildouts, finance.yahoo.com.

Management at Micron expected demand to outstrip supply beyond 2027 and said it is signing new multiyear Strategic Customer Agreements that it claims will “fundamentally transform our business model,” trefis.com. The same report said Micron is the only U.S.-based manufacturer of memory and storage, trefis.com.

Across 15 major market shocks discussed by Trefis, Micron’s average peak-to-trough drawdown was 34%, versus the S&P 500’s 16% in those periods, trefis.com. Trefis said the stock fell as much as 77% in the 2008-2009 Global Financial Crisis, and it cited declines of 70% during 2014-2016 oil collapse and 49% in the 2022 inflation shock, trefis.com.

Trefis said the median time for Micron to recover its pre-shock peak was about 9 months, while the slowest recovery followed the Summer 2007 Credit Crunch at about 71 months, trefis.com. The report added that investors should be prepared for the possibility of being underwater for extended periods, trefis.com.