Micron Gets a Bear Call as Paribas Warns on Oversupply
Micron Technology Inc. shares tumbled on Thursday, with the maker of computer memory chips extending a recent selloff as BNP Paribas Exane warned that the stock would continue to underperform others connected to artificial intelligence.
Tweet on Micron’s stock fluctuation
@MicronTech is in oversupply troubles as shares have tumbled more than 40% off a peak reached in June.#micron #chips #ai #semiconductor pic.twitter.com/R7EhT2z1Kv
— The_Journalbiz (@the_journalbiz) September 13, 2024
Bloomberg chart
Karl Ackerman downgraded the stock by two notches, to underperform from outperform, becoming the only analyst tracked by Bloomberg to recommend selling the shares. He also cut his price target to a Street-low view of $67, down from $140. In contrast, more than 90% of analysts have the equivalent of buy ratings, and the average price target is $156, more than 80% above its current price.
“While some investors correctly anticipate downside risk to near-term results, we think Micron will underperform AI peers through ’25,” he wrote. He added that capacity oversupply of high-bandwidth memory (HBM) chips will lead to “a faster than anticipated market correction of conventional DRAM ASPs,” referring to average selling prices for DRAM memory chips.
- Shares fell 6% to $85.21. The stock is on track for its lowest close since February, having dropped more than 40% off a June peak.
Even with that slump, Ackerman wrote, the “risk-to-reward at current level remains unfavorable.” Micron is essentially flat on the year, compared with a 16% gain for the Philadelphia Stock Exchange Semiconductor Index. AI-focused chipmaker Nvidia Corp. is up nearly 140%.
