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Why Is Micron Stock Still Falling?
The Motley Fool • • business
Key Points:
- Micron's stock dropped 3.2% following Taiwan Semiconductor Manufacturing Company's (TSMC) strong Q2 earnings report, despite TSMC's profits growing 77% year over year.
- Investors are concerned about TSMC's increased capital investment of over $60 billion this year, fearing it may hurt the company's free cash flow, leading to a 1.5% sell-off in TSMC shares.
- Increased chip production from TSMC, especially CPUs and GPUs for AI, is expected to boost demand for Micron's HBM memory chips, potentially benefiting Micron's profits.
- Micron also announced strategic supply agreements with seven major automotive Tier 1 suppliers, ensuring future order certainty and stable profit margins in the automotive memory chip market.
- Despite the stock sell-off, Micron's own business fundamentals and partnerships suggest positive long-term prospects for the company.
