Micron (MU 8.27%) stock is getting hit with sell-offs in Tuesday's trading and was down 3.7% as of 1:45 p.m. ET. At the same point in the daily session, the S&P 500 and the Nasdaq Composite were down 0.8% and 1.9%, respectively. Micron stock had been off as much as 10% earlier in trading.
Valuations for artificial intelligence (AI) chip stocks are taking substantial steps back today in a broad risk-off trade, and investor concerns tied to potential volatility stemming from SpaceX's IPO appear to be a significant factor in the dynamic. Concerns about the next round of inflation data are also a catalyst driving the selling action.
Image source: Getty Images.
Is the chip trade losing steam?
Chip stocks have been big winners this year, and Micron has been one of the companies leading the charge. The company's share price is still up roughly 219% year to date even after recent sell-offs.
Along with a broad-based surge of bearish trading for AI chip companies and fears that SpaceX's record-setting, $1.77 trillion IPO valuation could create a substantial new source of volatility for the market, Micron's valuation may also be under pressure due to geopolitical news. Bloomberg published a report today stating that Taiwan is moving to introduce much stricter export restrictions on the sale of advanced AI hardware to China.
NASDAQ: MU
Key Data Points
Tomorrow could be a big day for Micron stock and the market at large
In addition to concerns about the sustainability of bullish momentum for the AI chip trade and potential adverse valuation impacts connected to SpaceX's IPO, investors are also feeling jittery ahead of tomorrow's Consumer-Price-Index (CPI) report. The Bureau of Labor Statistics (BLS) will publish CPI data for May before the market opens tomorrow, and the print could have a huge impact on the broader market. The market could soar if inflation comes in relatively muted, but there's a risk that tech stocks will see big sell-offs if inflation ticks upward.
