Key insights
- Micron's stock experienced a significant decline, falling 7.3%, largely attributed to Broadcom's earnings report and subsequent stock sell-off. Despite Broadcom exceeding expectations and reporting strong AI semiconductor sales growth, the market reacted negatively, impacting Micron. This suggests a potential disconnect or sector-wide sentiment shift, even as underlying AI demand appears robust, which could signal headwinds for memory chip suppliers.
Easy come, easy go. After four straight days of going nowhere but up -- culminating in a modest 1.5% gain Wednesday -- shares of Micron (MU 7.24%) stock took a U-turn this morning, falling 7.3% through 11:50 a.m. ET.
You can probably blame Broadcom (AVGO 12.47%) for that.
It's a shame, really. Just one day after Morgan Stanley gave Micron its final boost -- more than doubling its price target after seeing DRAM prices spike through May -- Micron stock collapsed this morning on Broadcom's earnings news and subsequent 15% sell-off.
But how bad was this news, exactly?
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Reporting earnings for its fiscal Q2 2026, Broadcom beat expectations on both sales and earnings, reporting a pro forma profit of $2.44 per share on $22.2 billion in sales. Management also beat forecasts for Q3 guidance, predicting sales of $29.4 billion versus Wall Street's forecast of $28.5 billion. Broadcom reported 85% profits growth in the quarter, and free cash flow up 60% year over year.
And this is the "bad" news that's sinking Micron stock today?
One little-known company, called an "Indispensable Monopoly" owns the technology Nvidia, AMD, and Intel cannot function without. And it is still just a fraction of Nvidia’s size.
We just released a brand-new report with the full story and the company’s name.
It doesn't make a lot of sense to me.
Running down the quarter, Broadcom CEO Hock Tan confirmed that the artificial intelligence revolution is alive and well, pointing to 143% year-over-year growth in the company's AI semiconductor chip sales, and noting nearly half the money Broadcom now makes comes from sales for AI data centers.
To me, this implies that demand for Micron's memory chips should remain similarly strong and, according to Morgan Stanley's note just yesterday, "there's no quick fix to the memory shortage," with observed prices still rising.
Long story short, I think Micron's going to do just fine, and today's sell-off is just a bump in the road.