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Micron’s share price has plummeted this year due to growing worries about semiconductor demand. The stock dropped to $48.42, its lowest since November 2020, and is down about 50% from its all-time high, giving the company a market cap of over $55 billion. Other chip stocks, like AMD and Nvidia, have also seen significant declines recently.
Micron’s stock fell sharply after the company warned about weakening customer demand and high inventory levels. With around $6.7 billion worth of inventory, its total revenue dropped by 23% to $6.6 billion. Despite a strong fiscal year with over $30.8 billion in revenue, the company saw a 23% decrease in DRAM revenue, which fell to $4.8 billion, while NAND revenue was $1.7 billion.
Revenue across different segments also declined: Compute and Network revenue dropped by 25%, Mobile Business Unit by 23%, and Embedded Business Unit by 9%. These declines indicate that the company is struggling as demand decreases, which could also impact other semiconductor stocks like AMD, Intel, Nvidia, and Taiwan Semiconductor.
Micron has stated that it expects continued challenges, with further declines in NAND and DRAM shipments due to decreased demand and the strong US dollar, which has made upgrades costly. Companies are also tightening their budgets.
The weekly chart shows Micron’s stock formed a double-top pattern around $100, a typically bearish sign. The stock has fallen below the neckline of this pattern at $64 and all moving averages, with the Relative Strength Index (RSI) also declining.
Based on the double-top pattern, Micron’s stock is likely to continue falling. If this trend persists, the next key support level to watch is $42, which was the lowest level on August 10. A move above $60 would change this bearish outlook.