Why Micron Stock Just Dropped

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It’s getting hard to tell where **Nvidia **(NVDA 3.12%) stock stops, and **Micron **(MU 5.11%) stock starts.

Over in China, bad news is emerging from the just-concluded Trump-Xi summit. Yesterday, it was reported the U.S. will permit Nvidia to sell H200 artificial intelligence chips to 10 Chinese companies. Today, the news is that no sales actually happened.

Upon discovering this, investors sold off Nvidia stock by 3.4% – and Micron investors sold off their stock by 5.5%, as of 11:50 a.m. ET.

Image source: Getty Images.

Why Nvidia’s news might be bad news for Micron

According to The Wall Street Journal, President Trump pooh-poohed the lack of an H200 deal, explaining Chinese buyers didn’t buy Nvidia chips at the summit simply “because they chose not to. They want to try and develop their own.” Later reporting confirmed that the would-be Chinese buyers, including giant companies like Alibaba (BABA 6.04%) and ByteDance, were in fact not “authorized” by the Chinese government to buy Nvidia chips.

Maybe this was done to deny the U.S. President an immediate win at the summit, and sales agreements eventually will be signed. It’s also possible, though, that China is serious about wanting to “develop their own” semiconductor industry, and willing to pass on more advanced Nvidia chips temporarily to do this.

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NASDAQ: MU

Micron Technology

Today’s Change

(-5.11%) $-39.63

Current Price

$736.38

Key Data Points

Market Cap

$875B

Day’s Range

$719.00 - $749.49

52wk Range

$90.93 - $818.67

Volume

1.1M

Avg Vol

44M

Gross Margin

58.54%

Dividend Yield

0.06%

What’s next for Micron

That could be bad news for Nvidia and Micron in the long term if China succeeds in developing advanced chips that can compete with U.S. companies on global markets. Near-term, though, I honestly don’t see a lot to worry about here.

Insatiable demand for AI chips, and for the NAND and DRAM chips Micron makes to pair with them in data centers, means Micron can always find other buyers if China chooses not to buy. Today’s news is simply not a great reason to sell.

MU-7.22%
NVDA-4.36%
BABA-6.27%
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