Easy come, easy go. Micron (MU -4.36%) stock closed up 3.2% Thursday evening, but it's giving all those gains back this morning, with shares down 5.7% through 10 a.m. ET.
And yet, the news for Micron today is actually pretty good.
Image source: Micron.
Citi says "buy chip stocks"
Let's start with the news from Wall Street, where Citigroup is calling the recent broad-based sell-off in semiconductor stocks a buying opportunity for investors. Insatiable data center demand is driving sales of AI chips and memory chips from companies such as Micron to support them, says Citi. Roughly 34% of semiconductor demand comes from this direction, and Citi sees demand continuing to outstrip supply through 2030.
Automotive and industrial chips demand makes up 21% of the market, and is growing as well. Really, the only market for chips that's weakening is in PCs, mobile phones, and consumer electronics. That's 42% of the market -- a big chunk -- but it's only weakening because memory costs so much, and there's not enough supply!
Suffice it to say, all of this sounds pretty bullish for Micron, which supplies the memory and reaps the high prices.
NASDAQ: MU
Key Data Points
Intel proves demand is strong
On top of this good news, Intel (INTC -2.94%) just reported a big earnings beat -- pro forma profits of $0.42 per share that were twice what Wall Street expected -- and sales growing 25% to $16.1 billion, beating estimates and showing Intel's fastest revenue growth in nearly 15 years.
Intel CEO Lip-Bu Tan says "AI is driving unprecedented demand for compute," with notable growth in sales of Intel Xeon processors for inference solutions (i.e., answering questions). That's a segment of the artificial intelligence market known to require especially large amounts of memory chips to function.
These are all reasons to buy Micron stock -- not sell it.
