Micron Stock Slides Amid Interest Rate Worries, But AI Demand Remains Strong
Micron stock took a hit this week, dropping 5.9% to $823.03 on Friday after a big jump of 18% on Thursday.
The decline was largely due to renewed interest rate worries, as three Federal Reserve policymakers dissented against holding rates steady, citing concerns that higher rates would squeeze consumer and corporate spending, which would in turn affect Micron's sales numbers.
Big gains like the one Micron experienced on Thursday often lead to pullbacks, inviting profit taking. This volatility may persist as investors remain uncertain about how long the current memory boom can continue.
However, despite the decline, Apple CEO Tim Cook expressed confidence in Micron's future, stating that his company expects to pay higher memory costs in the coming quarter and hinting at increasing demand for Micron's products.
Amazon's raised capital expenditure guidance from $200 billion to $220 billion also points to a growing market for memory chips, which is driving up demand. Micron CEO Sanjay Mehrotra has emphasized that AI-driven demand is accelerating and expects durable industry fundamentals to hold through 2027.