Shares of Micron Technology (MU -3.85%) were slipping Thursday. The firm’s stock is down 2.9% as of 1:25 p.m. ET, but lost as much as 5.4% earlier in the day. The move down comes as the S&P 500 (^GSPC 0.14%) gained 0.3% and the Nasdaq Composite (^IXIC -0.34%) fell 0.1%.
Despite news of a new artificial intelligence (AI) initiative from the Trump administration, Micron shares were hurt by its rivals’ recent earnings report.
Losing memory
Micron is a semiconductor firm specializing in memory, supplying Nvidia with the high-bandwidth memory (HBM) components necessary to build Nvidia’s AI-powering Superchips. The relationship is not exclusive, however. Among Micron’s rival Nvidia suppliers is SK Hynix.
The company’s earnings, released Wednesday, showed strong revenue growth. This would normally bode well for rival firms like Micron, indicating its next report would show similar growth. However, the earnings call included a warning from the company’s CFO, Kim Woohyun, that demand in the coming year was uncertain. While AI-driven demand appears strong, demand from mobile and PC clients is less so amid shifting trade policy and geopolitical risks.
What’s next for Micron?
Despite the uncertainty from mobile and PC clients, AI demand doesn’t look to be waning. The company is in an excellent position to take advantage of the continued monster growth we’re seeing in the AI market. Headquartered in Idaho, it’s also more likely than its South Korean peers to benefit from President Trump’s initiatives, like the newly announced Project Stargate. It would make a great addition to a well-rounded portfolio.
Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
