falling as the Iran war continues. On Monday, Micron Technology (MU) fell by nearly 10%. Despite trading at a forward price-to-earnings ratio of just 6 times, the post-earnings slump mattered.
Technology investors sold optical suppliers like Coherent (COHR) and Lumentum (LITE). Applied Optoelectronics (AAOL) also lost momentum. Credo Technology (CRDO) did not perform well, as shares closed the day down by 7.8% on Monday.
Investors dismissed Micron’s solid quarterly results and profit margin expansion from the memory chip shortage. Even though high-speed storage prices are holding up better than memory, shares of Seagate (STX), WD (WDC), and Sandisk (SNDK) pulled back.
Chip suppliers like Intel (INTC), Nvidia (NVDA), and AMD (AMD) also got caught up in the negative sentiment.
Stock markets are assigning a heavier discount to the chip sector. Traders believe that the ongoing shipping crisis in the Strait of Hormuz will hurt the global economy. Energy prices in Asia will sharply increase the cost for manufacturers. Firms like Taiwan Semiconductor (TSM) or ASML (ASML) might raise prices to sustain their profitability.
Higher prices would discourage firms from spending more on AI hardware. Unfortunately, OpenAI needs AI-related demand momentum to continue. If it slows down, its IPO may not raise enough money.
Throughout March, investors lost their optimism for Microsoft (MSFT). MSFT stock has fallen daily since March 10 (except for one day). Alphabet (GOOG) also pulled back to prices not seen since last November. Risks are rising that AI-related tech names will keep
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