Micron (MU -2.62%) stock slipped 2.5% thorugh 2:25 p.m. ET Monday after OpenAI announced over the weekend that it will pause training on some of its artificial intelligence models as it investigates new reports of AI agents going "rogue."
Image source: Micron.
Why this might be bad news for Micron stock
Training AI models -- and even more using AI to answer questions (inference) and operate AI agents requires enormous amounts of memory. All year long, this rise in demand for computer memory has been pushing prices higher for the DRAM and NAND memory chips that Micron produces, boosting sales, profit margins, and bottom-line profits, too.
A chorus of calls lately to slow the pace of AI advancement, however, has investors wondering how long the big profits can last for Micron. Additionally, a recent rise in U.S. interest rates -- and warnings that persistently high inflation may require further rate increases -- is putting pressure on tech stocks in general.
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Not everyone's worried about Micron stock
Despite the news from OpenAI and the faltering share price, Wall Street isn't the least bit concerned. As StreetInsider.com reports, RW Baird raised its price target on Micron stock to $1,520 today, while DA Davidson and JPMorgan both reiterated their buy ratings on the stock ahead of Wednesday's upcoming earnings release.
JPMorgan analyst Harlan Sur predicted a "beat-and-raise" quarter on continued tight DRAM and NAND supply. Davidson analyst Gil Luria agrees and thinks a price target of $2,000 a share isn't unreasonable. Baird analyst Tristan Gerra comments that he sees DRAM demand continuing, supply growth moderating, and prices rising in 2027, all on "a surge in agentic AI demand."
Does any of this sound to you like Wall Street is worried OpenAI will slow the rate of AI growth? Because it doesn't sound like that to me.
