Micron Technology (MU) shares tumbled 5.06% during Monday's regular trading session, reversing sharp pre-market gains as a broad selloff hit the memory chip sector. The decline came amid renewed caution on the storage industry's outlook and intensifying competitive pressures.
The selloff was triggered by a warning from Morgan Stanley analyst Shawn Kim that the AI-driven memory industry rally is approaching an inflection point, with memory contract prices expected to peak in the fourth quarter. Kim noted that earnings revision ratios for memory manufacturers have slipped from a 92% peak to 77%, while traditional DRAM contract price growth narrowed sharply from 58%-63% quarter-over-quarter in Q2 to just 13%-18% in Q3. The broader semiconductor sector also weakened, with SK Hynix, AMD, and NVIDIA all trading lower during the session.
Additionally, the blockbuster trading debut of Chinese memory rival ChangXin Memory Technologies (CXMT), which surged over 400% on its first day in Shanghai, added to concerns about increased competition in the global DRAM market. The combination of cyclical peak fears and rising Chinese competition weighed heavily on Micron and its peers throughout the session.
