The global AI frenzy took a hit earlier this week when Nvidia shares entered correction territory. A global gauge tracking semiconductor shares fell about 5% since reaching an all-time high earlier this month. Micron, which supplies memory for PCs, smartphones, and data centers, faces share price uncertainty as it recovers from a slump last year. The company's briefing fell short of what SK Hynix offered earlier, stating that its HBM production capacity is largely sold out through 2025.
Key takeaways:
- Micron Technology Inc.'s shares fell about 8% after the company's forecast fell short of the highest estimates, highlighting the risks of investing in AI chipmakers.
- The selloff also affected South Korea’s two biggest companies, Samsung Electronics Co. and SK Hynix Inc., which are also memory chip providers for the AI supply chain.
- Despite doubling its shares in the year prior to its report, Micron was penalized for not exceeding high expectations, indicating unrealistic market expectations.
- Micron's position in the AI memory market is not as dominant as SK Hynix's or in the broader memory industry like Samsung, adding to the uncertainty of its share price.