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Introduction

Micron Technology (MU), a constituents in our AI Hardware (Semiconductor) Integrated Device Manufacturers Portfolio, encountered a major setback last week (ending July 18th) after having gone UP 23% in May and 32% in June but is now DOWN 8.3% so far in July. 

About Micron Technology

Micron Technology, Inc., headquartered in Boise, Idaho, designs, develops, manufactures, and sells high-bandwidth memory chips and non-volatile and re-writeable semiconductor storage devices that provide fast read speeds. HBM, in simple terms, is a certain number of conventional DRAM (direct random-access memory) chips stacked together to achieve greater performance and efficiency. HMB only recently came into its own with the advent of generative AI, which requires components that can handle massive amounts of data without lag time.

Reasons For Stock Decline

1. Profit-Taking: As mentioned in the introduction MU had gone UP 23% in May and 32% in June driven by AI memory demand and bullish earnings guidance and, as such, the drop, in large part, reflects profit-taking.
2. Technical Breakdown: Trading volume fell significantly, suggesting reduced demand and momentum reversal.
3. SK Hynix Downgrade Contagion: A Goldman Sachs downgrade of SK Hynix, a key competitor, spilled over into Micron’s valuation.
4. Sector-Wide Pressure: Broader chip sector weakness sparked by cautious outlooks from ASML (see here) and TSMC added to the selling pressure.

Our AI Hardware (Semiconductor) Integrated Device Manufacturers Portfolio

Below is how Micron's stock performed last week (w/e July 18th) compared to its peers, in descending order, and MTD: 

1. Microchip Technology (MCHP): UP 0.3% w/e July 28th; UP 6.1% MTD
2. Infineon Technologies (IFFNY): DOWN 0.2% w/e July 18th; UP 6.0% MTD
3. STMicroelectronics (STM): DOWN 0.9% w/e July 18th; UP 8.1% MTD
4. Analog Devices (ADI): DOWN 1.2% w/e July 18th; UP 2.1% MTD
5. NXP Semiconductors (NXPI): DOWN 1.3% w/e July 18th; UP 4.1% MTD
6. Intel Corporation (INTC): DOWN x% w/e July 18th; UP x% MTD
7. Texas instruments (TXN): DOWN 1.4% w/e July 18th; UP 1.8% MTD
8. Micron Technology (MU): DOWN 8.1% w/e July 18th; DOWN 8.3% MTD

Summary

On average, the portfolio was DOWN 2.1% w/e July 18th, is UP 2.4% MTD and is UP 17.7% YTD.

Conclusion

Despite the dip, Micron remains a strategic player in AI memory infrastructure. The 27 analysts that cover Micron Technology stock have:

• a consensus rating of "Strong Buy" and
• an average price target of $152.11, which forecasts a 33.71% increase in the stock price over the next year. The lowest target is $84 and the highest is $250.

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