What Happened?
Shares of memory chips maker Micron (NYSE:MU) jumped 6.7% in the morning session after Nvidia identified the company (Micron) as a key supplier of chips for its GPUs. At the CES 2025 event, Nvidia's CEO, Jensen Huang, unveiled the GeForce RTX 50 Series GPUs for desktops and laptops, targeting gamers. These innovations could spark more demand for next-generation computing devices and the critical components powering them, such as Micron's memory chips.
After the initial pop the shares cooled down to $103.62, up 4.4% from previous close.
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What The Market Is Telling Us
Micron’s shares are very volatile and have had 20 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 19 days ago when the stock dropped 18.1% on the news that the company reported disappointing third-quarter (FQ1 2025) earnings. Its revenue and EPS guidance for next quarter missed significantly, sending shares lower. The weak outlook was driven by three main factors: a slowdown in demand for data center SSDs, slower-than-anticipated inventory absorption in consumer markets such as PCs and smartphones, and an industry-wide oversupply of NAND memory.
In contrast, Micron achieved a notable improvement in its inventory levels, and its adjusted operating income exceeded Wall Street's forecasts. Overall, this was a challenging quarter for the company.
Micron is up 18.7% since the beginning of the year, but at $103.62 per share, it is still trading 32.5% below its 52-week high of $153.45 from June 2024. Investors who bought $1,000 worth of Micron’s shares 5 years ago would now be looking at an investment worth $1,778.
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