Micron falls 5% in premarket, paring earlier gains amid tech rout

Micron Technology experienced a notable decline on Friday, with its shares dropping nearly 5% in premarket trading. This downturn followed a week of impressive gains after the company reported exceptional earnings. The dip was part of a broader trend affecting U.S. semiconductor stocks, as several key players faced similar challenges. Intel saw a decrease of over 3%, while Sandisk, Arm, and Marvell also posted losses of 5%, 4%, and 3.7% respectively. Investor sentiment is currently cautious, primarily due to escalating costs associated with artificial intelligence infrastructure, which has led to a sell-off impacting markets globally. In Europe, the trend continued as significant chip manufacturers also recorded losses; ASML fell by 2.2%, Infineon by 3.7%, ASM International by 2.8%, ST Microelectronics by 3.3%, and Be Semiconductor by 2%. In Asia, Softbank led the losses with a staggering plunge exceeding 12%. Despite the recent stock decline, Micron's performance in its third quarter was remarkable, with revenue skyrocketing to $41.46 billion from just $9.3 billion a year earlier, substantially surpassing analysts' expectations. Looking ahead, the company anticipates revenue of approximately $50 billion for the upcoming quarter, a significant increase from $11.3 billion in the same period last year. The soaring demand for memory chips, driven by major hyperscalers constructing AI infrastructure and data centers, is contributing to this revenue surge. However, this spike in demand is simultaneously tightening the supply of memory chips for other devices, such as smartphones and PCs, thereby pushing prices higher and boosting Micron's earnings.