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Why Micron Technology (MU) Shares Are Sliding Today


Adam Hejl /
2023/03/31 1:32 pm EDT

What Happened:

Shares of memory chips maker Micron (NYSE:MU) fell 5.06% in the morning session after the Cyberspace Administration of China commenced an investigation into the company's products that are sold in the country. The investigation examines critical areas such as information infrastructure and hidden security risks in China's technology supply chain operations.

What is the market telling us:

Micron Technology's shares are somewhat volatile and over the last year have had 19 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business. The previous big move was 2 days ago, when the stock gained 6.57% after the company reported earnings for the latest quarter. While the results trailed the consensus estimates for revenue and operating profits, Wall Street analysts noted that the semiconductor company had faced a steeper slump than anticipated, but signs of a rebound are emerging. The outlook from the company was optimistic, with Sanjay Mehrotra, the chief executive, affirming his "confidence" in the long-term demand scenario and envisaging "gradual improvements" in the industry's supply-demand equation. The stock reaction suggested that the market is putting more weight on longer-term risk/reward than near-term cyclical results.

Micron Technology is up 20.9% since the beginning of the year, but at $60.905 per share it is still trading 21.8% below its 52-week high of $77.89 from March 2022. Investors who bought $1,000 worth of Micron Technology's shares 5 years ago would now be looking at an investment worth $1,216.4.

Is now the time to buy Micron Technology? Access our full analysis of the earnings results here, it's free.