NVDA - Nvidia Intel ride Micron's coattails as chip stocks head north

2023-03-29 10:01:34 ET

Nvidia ( NASDAQ: NVDA ), Intel ( NASDAQ: INTC ) and other leading chip stocks rose Wednesday as much of the semiconductor sector rode the coattails of some analysts' positive views on Micron Technology ( NASDAQ: MU ).

Micron ( MU ) reported fiscal second-quarter results on Tuesday that showed the memory chipmaker turning in a loss and revenue that fell by more than half of what it brought in during the same period a year ago. However, Chief Executive Sanjay Mehrotra said he was "confident" about Micron's ( MU ) longer-term prospects and that "we expect gradual improvements to the industry’s supply-demand balance" that has caused Micron's ( MU ) to record $1.43B in inventory writedowns in its fiscal second quarter.

Analysts such as Barclay's Tom O'Malley said Micron's ( MU ) results and outlook suggest it is "well-positioned" as business in the data center market is showing signs of improving. O'Malley added that the interest in artificial intelligence technology should benefit Micron ( MU ) as he called AI a "real driver" of chip sales to data centers in the years ahead.

Micron ( MU ) shares climbed almost 3% as U.S. stock markets opened, and other chip sector bellwethers also rose in conjunction.

Nvidia ( NVDA ) and Advanced Micro Devices ( AMD ) each rose almost 2%, while Intel ( INTC ) climbed more than 3% in early trading. Among leading semiconductor equipment makers, Applied Materials ( AMAT ) moved north by 2%, Lam Research ( LRCX ) was up by almost 3% and KLA Corp. ( KLAC ) rose more than 2%.

Qualcomm ( QCOM ) rose by more than 3%, and Broadcom ( AVGO ) managed to edge up by 1%. For its part, Broadcom ( AVGO ) appeared headed toward more dealings with British business regulators, as the U.K.'s Competition and Markets Authority said it would be heading into a new phase of reviewing Broadcom's ( AVGO ) proposed $61B cash-and-stock acquisition of virtualization software and technology company VMware ( VMW ).

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