Micron Technology NASDAQ:MU shares fell more than 4% on Friday as investors took profits following this week's rally, while mounting competition from Chinese memory chipmakers added pressure to the stock.
Micron had surged earlier in the week after Tesla (TSLA) CEO Elon Musk said during the company's second-quarter earnings call that the automaker had secured a substantial supply of Micron memory chips on favorable terms. However, the gains reversed as traders reassessed the outlook for the memory chip market.
Chinese memory producers CXMT and YMTC have continued expanding their presence, with CXMT securing multibillion-dollar supply agreements with ByteDance and Tencent. The developments have raised questions about future competition in the server memory market, while some bearish analyst commentary has also pointed to the potential for softer DRAM pricing as AI computing costs evolve.
Despite stronger-than-expected quarterly results from Intel (INTC), the broader semiconductor sector saw limited support, suggesting the earnings boost remained company-specific. Major equity indexes traded little changed, indicating Micron's decline was largely driven by stock-specific and industry factors rather than a broad market selloff.
Micron shares retreated after the recent rally, though Wall Street analysts continue to maintain a broadly positive long-term outlook on the company.