Nvidia, Advanced Micro Devices lead chips lower as Micron cuts spending again
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Nvidia (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD) and Monolitchic Power Systems (MPWR) were among the largest declining semiconductor stocks in the S&P 500 on Thursday, each falling more than 6%, as investors worried about weakening global growth and industry stalwart Micron Technology (NASDAQ:MU) cutting its outlook and spending forecast again.
On Wednesday, Micron (MU) reported fiscal first-quarter results that were slightly lower-than-expected, but issued an outlook for the second-quarter that was well below expectations. It expects revenue to be $3.8B, plus or minus $200M, with a quarterly loss of 62 cents per share.
Analysts were expecting revenue revenue of $3.84B and a loss of 32 cents per share.
The company also said it cut almost 5,000 workers in the year ahead as it continued to conserve cash amid a weakening global economy.
Micron (MU) also said it is âsignificantly reducingâ capital expenditure for fiscal 2024.
In a statement, Micron (MU) Chief Executive Sanjay Mehrotra said the company is "taking decisive actions to cut our supply and expenses" and that it expects improvements in customer inventories to improve and enable revenue to start growing in the second half of next year.
Mehrotra added that he believes Micron (MU) will be able to "deliver strong profitability once we get past this downturn."
Micron (MU) added that "over the next few months", it expects "gradually improving demand trends for memory as customer inventory levels improve further, new CPU platforms are launched, and China's demand starts to grow as its economy reopens."
Micron's (MU) results and outlook sent its own stock lower by nearly 4%, while chip equipment suppliers such as ASML Holding (ASML), Applied Materials (AMAT), Lam Research (LRCX) and KLA Corp. (KLAC) declined between 4.5% and 9% each.
Other semiconductor stocks also fell sharply on Thursday, including Intel (INTC), Qualcomm (QCOM) and NXP Semiconductors (NXPI), all of which fell 4% or more. Broadcom (AVGO) fared slightly better, losing slightly less than 2%.
Skyworks Solutions (SWKS), Qorvo (QRVO) also fell 4% or more.
Earlier this month, investment firm Bernstein picked AMD (AMD), Nvidia (NVDA) and Qualcomm (QCOM) among its top picks in the semiconductor sector going into 2023.