- Top chipmakers Nvidia, Intel and Advanced Micro Devices fell 0.3% to 0.8% amid a broader market selloff in Thursday’s premarket.
- Micron’s reported blowout Q2 results and issued a strong forecast on Wednesday.
- Retailer traders on Stocktwits see the MU stock drop as a classic sell-the-news event, with analysts saying a rebound is imminent.
Shares of Micron Technology fell 4.3% in early premarket trading on Thursday despite a blowout earnings report a day earlier – echoing the muted post-results reaction seen in Nvidia last month – and weighing on other memory chip stocks.
SanDisk, the top performer in the group, which has seen incredible gains due to memory chip shortages and favourable pricing over the past year, declined 4%, while Seagate and Western Digital declined 2.1% and 2.4%, respectively in early trade.
Top chipmakers Nvidia, Intel, and Advanced Micro Devices fell 0.3% to 0.8% amid a broader market selloff, as fresh developments in the U.S.-Iran conflict signaled a deepening crisis that risked engulfing the wider Middle East.
Iran on Wednesday issued an order to Saudi Arabia, Qatar, and the UAE to evacuate energy facilities following Israeli strikes on Iran's largest gas facility, the South Pars gas field.
Micron Drops Despite Blowout Quarter
Micron’s second-quarter revenue nearly tripled to $23.86 billion from $8.05 billion, handsomely beating analysts’ expectations of $19.18 billion. Adjusted profit of $12.20 per share also beat the $8.66 target.
The company forecast third-quarter sales with a mid-point of $33.5 billion versus the Street projection of $22.48 billion.
However, rising capital expenditure was a minor concern. CapEx jumped 62% to $5 billion last quarter; the company projected $7 billion for the current quarter and more than $25 billion for the fiscal year 2026.
‘Sell The News’ After 25% Rally
Stocktwits sentiment for MU dipped to ‘bullish’ early Thursday, down from ‘extremely bullish’ the previous day, with traders labeling the stock's drop a classic sell-the-news event.
Before the results, a sharp rally (25% in eight sessions) suggested that most of the upside from the results was already priced in.
Wall Street Says Long-Term Story Intact
Market commentators believe a rebound is imminent. CNBC’s Jim Cramer said in an X post: “It is not unusual for a stock like Micron to have a blow-off top only to come back a few weeks later. It is not worth freaking out about.”
The earnings only reinforced the long-term growth story, Patrick Moorhead, CEO of Moor Insights & Strategy, said.
“What people keep getting wrong: this is not a cycle. HBM demand is structural. The AI datacenter buildout is pulling through memory volumes this industry has never produced at this pace. GAAP gross margins doubling in 12 months is not cyclical. It is a company repricing into a structurally different demand environment,” Moorhead said.
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