To The Moon

Despite AI frenzy, semiconductors are also diverging.

Monday, investment firm Hedgeye added $Micron Technology(MU)$ as a short-sale target, and Micron shares fell 2% in afternoon trading.

Of course, Micron's decline wasn't due to shorting, but rather a downward revision to its outlook.

1. Micron's growth rate for FY2025 has been FULLY priced-in (the market is generally expecting 52% growth), so it's very much that there are too many surprises in store, especially with management lowering its guidance expectations in the face of seasonal challenges in the second quarter of FY2025 (ending February 2025)

2. Oversupply of high bandwidth memory is a real concern in 2025 due to changing market demand.

3. On the one hand, DRAM capacity could hit a new record next year. The challenges posed by $Samsung 's (SMSN.UK)$ HBM3e remain intractable, and it may be a matter of when, not if, they will be resolved and validated.Samsung has a lot of issues and urgently needs to catch up.This will add to supply concerns next year."

4. On the other hand, NAND flash also shows no signs of recovery in 2025.

So for Micron, guidance is relatively good in its non-AI areas, but the market is still still sceptical about its recovery, with inventory issues remaining due to weak demand in certain consumer end markets.

Key Competitors

1. Samsung Electronics

   • As a leading player in the memory market, Samsung is Micron's most formidable competitor. The company has substantial resources, allowing it to invest heavily in technology and production capacity. This often results in lower prices for consumers, putting pressure on Micron to remain competitive. $Samsung Electronics Co., Ltd.(SSNNF)$

2. SK Hynix

   • Another major competitor, SK Hynix, also specializes in memory products and has been expanding its market share aggressively. Similar to Samsung, SK Hynix benefits from economies of scale, which can lead to pricing advantages that challenge Micron's profitability. $SK Hynix, Inc.(HXSCF)$

3. Western Digital and Seagate

   • While primarily focused on data storage solutions, these companies compete indirectly with Micron in certain segments. Their advancements in storage technologies can influence customer preferences and shift market dynamics. $Western Digital(WDC)$

4. Intel

   • Intel competes with Micron not just in memory but also in broader semiconductor technologies. Intel's innovations can impact the demand for memory solutions, affecting Micron's market share. $Intel(INTC)$

5. NXP Semiconductors and Texas Instruments

   • These companies focus on different aspects of the semiconductor market but still represent competition for specific applications where memory solutions are integrated into broader electronic systems. $NXP Semiconductors NV(NXPI)$

And this statement has been echoed by the recent

Micron shares have shown great volatility this year.They hit an all-time high of $153 on 18 June and plunged more than 40% to $86 in early August alone.

In contrast, $NVIDIA (NVDA)$ continued to hit record highs after volatile previous months, reflecting strong expectations for its Blackwell chips.This positive and negative has instead become another strategy for hedge funds in a volatile market.