Micron stock falling as chip names trail steadier tech sector
Micron and Intel fell with chip peers Friday as Mizuho pointed to China memory worries, AI-spending risks and Korean market weakness.
By Frankie Delgado · News Reporter
3 min read
Micron stock falling was the loudest move in a rough Friday for semiconductor shares, with Intel and optical-chip names also sliding while Mizuho said the broader tech sector was holding up better.
The iShares Semiconductor ETF was down 2.5% as of midday Friday, according to MarketWatch. Micron Technology shares were off 5.2%, Intel fell 4.8%, and Coherent and Lumentum Holdings were each down more than 7%.
Mizuho managing director Daniel O’Regan told clients that investors were asking why the semiconductor group was underperforming so sharply. He said he did not see one single driver behind the move, pointing instead to several pressures hitting the sector at once.
Why is Micron stock falling?
O’Regan tied the weakness in Micron and other chip stocks to a mix of concerns: Intel’s failure to hold gains after earnings, fresh attention on Chinese memory-chip competition, worries over AI infrastructure spending and a sharp drop in South Korean stocks.
Intel was one of the sore spots. MarketWatch reported that the company posted its strongest revenue growth in 15 years in the second quarter and delivered results that broadly topped expectations. Even so, O’Regan said Intel’s stock giving back early gains may have weighed on sentiment across the chip trade.
Memory-chip worries were also in the frame. O’Regan noted that ChangXin Memory Technologies, a Chinese memory-chip maker, is expected to go public in Shanghai on Monday. He said the threat to U.S. memory makers from Chinese competition may be overstated, but reports that Apple has held meetings with CXMT could still be making investors reassess the company’s possible impact.
Reuters has reported that the U.S. has held off on blacklisting CXMT. MarketWatch also reported that the company has been designated a national-security risk and approved for the Commerce Department’s Entity List.
What are hyperscalers, and why do they matter here?
Hyperscalers are the giant cloud and computing companies building the data centers that power artificial intelligence services. Their spending matters to chip investors because those projects can drive demand for advanced semiconductors and related hardware.
O’Regan also flagged louder debate around hyperscaler spending and whether borrowing costs could create financing risks for the AI-infrastructure buildout. A Moody’s Ratings report released Wednesday estimated that capital expenditures by six leading hyperscalers will reach about $785 billion collectively this year and nearly $1 trillion in 2027.
Moody’s named Microsoft, Amazon.com, Alphabet, Meta Platforms, Oracle and CoreWeave as the main hyperscalers. In the report, Moody’s authors led by senior vice president Raj Joshi said circular relationships among AI labs, hyperscalers and high-end chip companies were adding risk to the industry.
The Moody’s report said partnership, ownership and guarantee agreements can help hyperscalers and semiconductor companies embed their technology with developers, but they also increase the risk if the expected demand for AI products does not arrive.
South Korea added another drag. O’Regan said weakness in the Korean chip sector may have carried over into U.S. semiconductor trading, while the Korea Composite Stock Price Index was down 5.7% Friday.
This story draws on original reporting from MarketWatch.