AMD leads semiconductor gains as sector bucks Micron worries
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AMD (NASDAQ:AMD) led semiconductor stocks largely higher on Thursday as the broader market rebounded after intense selling over the past several sessions, despite concerns about cautious guidance from industry stalwart Micron Technologies (NASDAQ:MU).
AMD (AMD) gained more than 4% on Thursday, while competitors Nvidia (NVDA) and Intel (INTC) added 1.4% and 1.3%, respectively.
On Thursday, The Wall Street Journal reported that French competition regulators raided Nvidia's (NVDA) offices in the country this week on worries over anticompetitive practices.
GlobalFoundries (NASDAQ:GFS), which was spun off by AMD (AMD) in 2009, rose nearly 2.8% on Thursday after CEO Thomas Caulfield told news outlet Handelsblatt that the company plans to invest $8B in its German chipmaking plant in an effort to double production by the end of the decade.
GlobalFoundries (GFS) is looking for the type of government support that Taiwan Semiconductor (TSM) is seeking for its proposed plant in Dresden. Last month, Taiwan Semiconductor's board of directors met to discuss the plant, which would receive roughly $5.5B in support from the Germany government.
Taiwan Semiconductor (TSM) shares rose 1.6% in mid-day trading on Thursday.
Micron (MU) shares fell 5% as Wall Street debated the company's mixed guidance for the coming quarter.
Wedbush Securities analyst Matt Bryson said the company's forecast looks " extremely conservative," given the improvement in fundamentals in memory. He added that Micron is likely to "meaningfully exceed" the company's own forecast and as such, he reiterated the firm's outperform rating and $80 price target on the stock.
Mizuho analyst Vijay Rakesh lowered his estimates on Micron (MU) even as the company is slated to see "continued execution" through fiscal 2024, as the company said it would boost capital spending, largely for the testing of high-bandwidth memory.
Looking ahead, Micron (MU) said it expects first-quarter sales to be between $4.2B and $4.6B, with the mid-point above the $4.21B that analysts had expected. On an adjusted basis, it expects to lose between $1 and $1.14 per share, compared to analyst expectations of an adjusted loss of 96 cents per share.
Micron (MU) also expects adjusted gross margins to be between -2% and -6%, below the 0.66% that analysts were looking for.
Seagate Technology (STX) and Western Digital (WDC), which often trade in tandem with Micron (MU), bucked the decline and rose around 2% each.
Most other semiconductor stocks were in the green on Thursday, including Broadcom (AVGO), Qualcomm (QCOM), Texas Instruments (TXN), ON Semiconductor (ON) and Analog Devices (ADI), each of which gained roughly 2% or more.
Semiconductor equipment stocks also joined in on the parade, even amid worries about ASML (NASDAQ:ASML) cutting its forecast for extreme ultraviolet lithography, or EUV, technology.
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