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MarketPulse: Micron Gives up Gains as Tech Turns Ugly

Published 12/17/2018, 01:15 PM
Updated 12/17/2018, 01:43 PM
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Investing.com - Chipmaker Micron gave up gains Monday as analysts expressed caution ahead of the chipmaker's quarterly results due Tuesday.

S.G. Cowen sounded the alarm on Micron ahead of earnings, cutting their price target on the chipmaker's stock to $45 from $62 on expectations the chipmaker will materially lower guidance. Micron (NASDAQ:MU) shares traded flat after trading as high as 3% intraday.

With DRAM and NAND prices expected to drop in 2019, Micron likely faces an uphill battle to convince market participants to stick around.

Morgan Stanley said it expected Micron to cut expectations for February quarter revenue by 20% to 25% to about $6.5 billion. The bank also reminded traders to look out for a potential cut to Micron's capital expenditure as a sign of more pain to come in the industry.

The downbeat outlook on Micron shook optimism in other chip stocks as Nvidia (NASDAQ:NVDA) fell 1%, giving up its intraday gains.

The fall in Nvidia comes just days after Citigroup said the plunge in chip stocks was close to reaching a bottom and suggested investors scoop up Nvidia shares, which look "cheap."

"Not only have Nvidia estimates been cut 18% on lower cryptocurrency demands, but gaming chip sale expectations have been reduced to make the stock look cheap," Citigroup Analyst Atif Malik wrote on Thursday.

The Philadelphia Semiconductor Index fell 0.13%, after gaining as much 1.6% intraday.

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