Micron Technology (MU) closed at a fresh 52-week high on Wednesday. The stock gained nearly 9%. The Semiconductor Industry Association said that global semiconductor sales increased by 25% Y/Y.
In September, chip sales grew by 48% Y/Y in the Asia Pacific region. It grew by 30.6% in the Americas and by 15% in China.
MU stock rallied alongside Seagate (STX). The storage supplier said that it would take advantage of the growth in demand. The buildout of artificial intelligence infrastructure capacity is the catalyst.
Markets overlooked Seagate’s agreement to exchange Senior Notes due in 2028, worth $500 million. Holders will get $503.4 million in cash and some STX stock. Western Digital (WDC) also rose, thanks to Seagate’s stock strength.
Super Micro Computer (SMCI) is at risk of erasing its stock rally from September. The stock peaked at around $60 in October and closed at $42.03 on Wednesday. SMCI stock lost 11.3% after it posted second-quarter results. Earnings per share were $0.35 (adjusted), below expectations. Revenue of $5 billion was $800 million below analysts' expectations.
SMCI’s forecast is disappointing. Although its revenue midpoint of $10.5 billion is $2 billion higher than expected, its EPS is $0.46 to $0.54. Analysts expected $0.62.
Investors should be wary of SMCI stock. The sales growth forecast contradicts the weak EPS ahead.
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