Micron stock tanks 17% as AI chip selloff deepens: What's next?
Micron shares plunge 17% in massive AI chip selloff
Micron Technology shares witnessed a massive selloff on November 5, plunging 17.46% to close at $656.39, their lowest level in nearly six months. The stock also touched an intraday low of $650 as investors dumped semiconductor and AI-related stocks amid growing concerns over the outlook for the AI trade. (Sources: TradingKey, Benzinga)
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Micron loses more than 30% from October peak
The latest decline has wiped out a significant portion of Micron's recent gains. Shares have fallen more than 30% from their October 28 peak of around $990. Trading volume surged to approximately 75 million shares, more than twice the recent average, highlighting the intensity of the selloff.
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Why are Micron shares falling? AI spending fears intensify
Growing concerns over the sustainability of AI infrastructure spending have triggered heavy selling in semiconductor stocks. Investors are increasingly worried that potential restrictions on data centre construction, including power and water constraints and regulatory hurdles, could slow infrastructure expansion and weaken future demand for high-bandwidth memory (HBM), server DRAM and enterprise storage.
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Taiwan plant construction pause adds to Micron worries
Adding to investor concerns, Micron reportedly paused construction of a planned memory chip facility in Taiwan. The development has raised questions about the company's capacity expansion plans and its ability to meet future AI-driven memory demand.
Reuters
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Semiconductor selloff spreads across Wall Street
Micron was not alone in facing heavy selling. SanDisk plunged more than 22%, while AMD and Western Digital also lost more than 17%. Seagate declined 16%, while Nvidia fell around 9%. The Philadelphia Semiconductor Index plunged 12%, marking its steepest decline since March 2020.
Reuters
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Micron stock jumps 4% in after-hours trading
Micron shares staged a recovery after the closing bell, jumping 4.11% to $683.40 in after-hours trading on November 5. The rebound followed the stock's 17.46% plunge during the regular session.
Reuters
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Micron's RSI signals oversold territory
Micron's Relative Strength Index (RSI) dropped to around 27.05, entering oversold territory. According to TradingKey's technical analysis, the stock has also broken below several key moving averages, with a bearish death-cross pattern emerging. While oversold conditions could support a short-term recovery, the broader technical outlook remains weak.
Reuters
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Can Micron stock fall below $500? Key levels to watch
TradingKey identifies $650 as an important immediate support level for Micron. A sustained break below this level could expose the stock to further downside towards $500, with another potential support zone at $450-$470. On the upside, a recovery could take shares towards $700-$737.88, followed by a potential test of the $752-$795 gap zone. These are technical scenarios, not guaranteed price targets.