Global technology stocks are experiencing a wave of selling, with Micron Technology shares declining in pre-market trading.
Earlier this week, the stock had surged significantly following the release of a much stronger-than-expected earnings report. Investors are adopting a cautious stance towards the massive capital expenditures by major corporations for building artificial intelligence infrastructure.
After a sharp rally fueled by the impressive quarterly results, Micron Technology shares fell substantially on Friday, giving back those earlier gains.
The memory chipmaker's stock was down nearly 5% in pre-market activity, with other U.S. semiconductor companies also showing weakness: Intel was down over 3%, SanDisk fell 5%, Arm dropped 4%, and Marvell Technology declined 3.7%.
Market participants are wary of the escalating costs associated with AI infrastructure build-out, a sentiment driving selling pressure across global financial markets.
Key European chip stocks also closed lower collectively: ASML fell 2.2%, Infineon dropped 3.7%, ASM International declined 2.8%, STMicroelectronics was down 3.3%, and BE Semiconductor fell 2%. In Asian markets, Japanese conglomerate SoftBank led the declines, with its stock plunging over 12%.
The broad downturn in AI-related stocks signals another potentially volatile trading session for the technology sector.
Micron Technology reported its third-quarter results this past Wednesday: quarterly revenue soared to $41.46 billion, a more than threefold increase from $9.3 billion a year earlier, significantly surpassing analyst expectations. The company forecast current-quarter revenue of approximately $50 billion, compared to $11.3 billion in the same period last year. On the day of the report, Micron's stock surged over 15%, bringing its cumulative gain over the past year to 863%.
The ongoing expansion of data centers and other AI infrastructure by major cloud providers requires large-scale purchases of memory chips from companies like Micron.
The explosive growth in demand for memory chips is squeezing supply for end-user devices like smartphones and personal computers, driving up memory product prices and substantially boosting Micron's corporate profits.
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