A sell-off in chipmaker stocks after the Federal Reserve’s interest rate announcement led to a bounce in the sector on Friday.
MU: Daily Chart
Micron has pulled back from $72 to $68 and may head lower to $65 if bearishness returns.
Micron has not seen the same performance this year as Nvidia, but the sector is hot for investors and may affect sentiment when the company releases earnings on Wednesday.
Nvidia stock rocketed as the early beneficiary of the AI boom this year, but other hardware companies are selling products that are needed in data centres every time Nvidia delivers GPU chips. The rollout of high-bandwidth memory technology next year could be a boost for Micron Technology.
Nvidia said it would begin shipping its new GH200 Grace Hopper Superchip this quarter and that it will have a new HBM3e memory in 2024. HBM, or high-bandwidth memory, is currently split around 50/50 between SK Hynix and Samsung. An analyst report recently said that HBM technology would be a big earner as large amounts of data are required for training and inference by AI systems.
“Micron is not playing at all” in the first-generation HBM3 market, the analyst said. But the company expects to start delivering its HBM3 product early next year.
During Micron’s previous earnings call in June, CEO Sanjay Mehrota said he expected “meaningful revenues” from the new product in fiscal 2024. The CEO also said that Micron’s HBMS chips were head and shoulders above the current products available.
Micron is still in the early stages of HBM product delivery, but analysts that are looking ahead will get to gauge the potential against current performance this week. Micron stock is already up 40% this year due to the hype around AI and chip-related stocks.
