Micron Stock Drops Despite Strong AI Demand Predictions
Amazon's recent earnings call revealed that it expects its capital expenditures to reach $220 billion for the year, up from a previous estimate of $200 billion. The main driver behind this increase is higher memory costs.
In the call, Amazon CEO Andy Jassy stated that even with increased spending on artificial intelligence (AI) infrastructure, the company will still not have enough capacity to meet all demand by 2026 and possibly 2027 as well.
On the surface, this news should be beneficial for Micron Technology (MU), a leading provider of high-bandwidth memory products used in AI infrastructure. However, the stock price actually dipped 5.9% from $874.66 to $823.03 on July 31.
One reason for this unexpected reaction is that Micron's stock had already risen 18.3% by July 30, making it more susceptible to profit-taking on the following day.