Is Micron's 9% Dip a Warning Sign or Buying Opportunity?
Industrywide concerns about AI development affected Micron this week.
Overview
What comes up must come down? Maybe, but maybe not. Shares of Micron (NASDAQ: MU) dropped more than 9% over the past week, rattling investors accustomed to Micron shares only going north. The pullback wasn't due to anything Micron said or did, but rather to a mix of uncertainty and fears about AI regulation and the slowing pace of its development.
Micron, along with rivals SK Hynix and Samsung, controls almost 90% of the global DRAM market. The demand for memory is unprecedented; these three companies control the vast majority of supply, and thus have pricing power. While there hasn't been antitrust scrutiny yet, this is another concern in the longer term.
Details
Ultimately, these fears feel a bit more panicky than based on the current reality, though. Micron's memory supply is sold out through 2026 and is nearly sold out for 2027. The company has said it can only meet a portion of customer demand in the medium term. This means that any AI-related slowdown is unlikely to affect Micron until at least 2028, if at all.
Source
Originally published at www.fool.com.