What Happened?
Shares of memory chips maker Micron (NYSE: MU) fell 4.2% in the afternoon session after a broad-based sell-off in the semiconductor sector pressured chip stocks. The decline was not isolated to Micron, as many major technology companies faced downward pressure. Other chipmakers, including ARM Holdings, Lam Research, Applied Materials, and KLA Corp, also recorded losses. The negative sentiment in the sector appeared linked to news from CoreWeave Inc., which reported that a data center delay would negatively impact its fourth-quarter expectations. This announcement prompted JPMorgan Chase to downgrade CoreWeave's stock. Adding to the pressure, shares of Nvidia also fell after reports that Japan's Softbank had sold its entire stake in the AI chip company.
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What Is The Market Telling Us
Micron’s shares are extremely volatile and have had 34 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 7 days ago when the stock dropped 4.2% on the news that investors reassessed stretched valuations following a period of strong gains, sparking a broad sell-off. The tech-heavy Nasdaq fell as much as 1.6%, with the S&P 500 also declining. The pullback was exemplified by AI firm Palantir Technologies, which dropped over 7% despite reporting better-than-expected sales. This negative reaction to positive news suggests investors are concerned about extreme valuations and are engaging in "long liquidation"—selling positions to lock in profits after a significant rally. Adding serious weight to this caution, leadership at both Goldman Sachs and Morgan Stanley highlighted the possibility of a correction in the equity markets over the next couple of years. Despite the euphoria driven by AI optimism and the promise of future rate cuts, these banks viewed this cooling-off period not as a disaster, but as a necessary and healthy feature of a long-term bull market.
Micron is up 177% since the beginning of the year, and at $242.15 per share, it is trading close to its 52-week high of $253.30 from November 2025. Investors who bought $1,000 worth of Micron’s shares 5 years ago would now be looking at an investment worth $4,297.
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