Micron Technology stocks posted their strongest one-day gain in nearly two months on Thursday before slipping nearly 3% in overnight trading. The initial rally was supported by Tesla CEO Elon Musk's statement that Micron provided a 'very significant allocation' of memory chips on 'reasonable terms' to the electric car maker, while the overnight decline tracked a sharp selloff in South Korean equities led by Samsung and SK Hynix stocks. The moves occurred as the S&P 500 logged its biggest drop in a month on Thursday and the Nasdaq fell for a third straight session to its lowest level in more than a month.
KOSPI Selloff Triggers Overnight MU Stocks Decline
MU stocks plunged in the overnight session, tracking a sharp slide in South Korean equities led by Samsung and SK Hynix stocks. The move in U.S. semiconductor stocks has become increasingly bundled with KOSPI, which is heavily weighted toward chipmakers Samsung and SK Hynix and has seen increased volatility lately. The overnight move came despite chip peer Intel reporting a strong quarter, with Intel shares also paring early gains late in the night.
On Thursday, the benchmark S&P 500 logged its biggest drop in a month, while the tech-heavy Nasdaq fell for a third straight session to its lowest level in more than a month. The declines followed quarterly results from Alphabet and Tesla and reflected a dimming outlook for the tech sector, compounded by renewed pressure from an escalation in the U.S.-Iran conflict.
Retail Sentiment Turns Bearish on Memory Stocks
Retail sentiment for MU stocks was 'bearish' as of late Thursday, even as Micron stock has gained 16% this week. The sentiment for peer memory stocks SanDisk and Western Digital was also in the 'bearish' zone, while the sentiment for Roundhill Memory ETF (DRAM) dipped to 'extremely bearish.'
Micron watchers have risen 3.7% over the past month and 12.2% in the past three months. At 202,923 watcher count, MU is one of the most watched tickers on Stocktwits.
One trader argued that "the market doesn't trade on past earnings or price. The market trades 6 to 18 months ahead. Given that, the chips are pricing for 2027 and 2028 numbers, once that cyclical part is done, what's the next phase? The cloud names, the actual growth on cloud capacity."
Another trader stated, "The semiconductor space is too volatile, that's a tell of peak status. The reason those names are actually delivering earnings is based on increased prices not volume. You can only raise prices so much. Eventually those investors and traders will see the cheap valuation in names like Microsoft, Google and others."
Traders Focus on $1,000 Resistance Level
Traders are intensely focused on Micron's persistent battle to break through and hold the $1,000 resistance level, which it fell below on July 2. Discussing the overnight sell-off, one trader wrote, "$DRAM just a straight line down all night in Korea."
FAQ
What caused MU stocks to decline overnight after Thursday's gains?
MU stocks slipped nearly 3% in overnight trading, tracking a sharp selloff in South Korean equities led by Samsung and SK Hynix stocks. The move came despite chip peer Intel reporting a strong quarter.
Why did Micron Technology stocks rally on Thursday?
The stock posted its strongest one-day gain in nearly two months on Thursday, supported by Tesla CEO Elon Musk's statement that Micron provided a 'very significant allocation' of memory chips on 'reasonable terms' to the electric car maker.
What is the retail sentiment for MU stocks?
Retail sentiment for MU stocks was 'bearish' as of late Thursday, even as the stock gained 16% this week. Micron watchers increased 3.7% over the past month and 12.2% in the past three months, reaching 202,923 watcher count on Stocktwits.
