Nvidia, Intel ride Micron's coattails as chip stocks head north
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Nvidia (NASDAQ:NVDA), Intel (NASDAQ:INTC) and other leading chip stocks put in a strong performance Wednesday as much of the semiconductor sector rode the coattails of some analysts' positive views on Micron Technology (NASDAQ:MU).
Micron (MU) reported fiscal second-quarter results on Tuesday that showed the memory chipmaker turning in a loss and revenue that fell by more than half of what it brought in during the same period a year ago. However, Chief Executive Sanjay Mehrotra said he was "confident" about Micron's (MU) longer-term prospects and that "we expect gradual improvements to the industryâs supply-demand balance" that has caused Micron's (MU) to record $1.43B in inventory writedowns in its fiscal second quarter.
Analysts such as Barclay's Tom O'Malley said Micron's (MU) results and outlook suggest it is "well-positioned" as business in the data center market is showing signs of improving. O'Malley added that the interest in artificial intelligence technology should benefit Micron (MU) as he called AI a "real driver" of chip sales to data centers in the years ahead.
Micron (MU) shares climbed more than 7% as U.S. stock markets opened, and other chip sector bellwethers also rose in conjunction.
Nvidia (NVDA) rose more than 2%, and Advanced Micro Devices (AMD) edged up by 1.6% by the closing bell, while Intel (INTC) climbed by almost 8% on the day.
Intel (INTC) got a boost from Wall Street enthusiasm for an investor event its held in which it focused on its data-center business and made multiple announcements about new chip products.
Among leading semiconductor equipment makers, Applied Materials (AMAT) moved north by almost 3%, Lam Research (LRCX) rose more than 6% and KLA Corp. (KLAC) shares finished the day with a gain of almost 4%.
Qualcomm (QCOM) rose by more than 3%, and Broadcom (AVGO) managed to edge just above its breakeven point. For its part, Broadcom (AVGO) appeared headed toward more dealings with British business regulators, as the U.K.'s Competition and Markets Authority said it would be heading into a new phase of reviewing Broadcom's (AVGO) proposed $61B cash-and-stock acquisition of virtualization software and technology company VMware (VMW).