Micron suffers record market-cap wipeout as Broadcom casts a shadow over chip stocks

By Hannah Pedone

The semiconductor trade is losing steam following Broadcom's earnings report

Micron's stock fell 7.7% on Thursday, its largest one-day loss of market cap ever.

As Broadcom recorded the largest one-day loss of market capitalization in its history Thursday, Micron Technology did the same.

While Broadcom's earnings results Wednesday struck D.A. Davidson analyst Gil Luria as "impressive," investors took issue with various aspects of the report. That cast a shadow over the wider chip sector, according to Luria.

Shares of Micron (MU) fell 7.7% on Thursday, subtracting $94.24 billion in market capitalization, according to Dow Jones Market Data. Broadcom (AVGO) itself shaved $286 billion off its market cap, the fourth-largest one-day market-value erasure for any U.S. company on record.

The PHLX Semiconductor Index SOX, a proxy for chip stocks, fell 2.2% on Thursday. Broadcom's stock slid 12.6%, Advanced Micro Devices' stock (AMD) dropped 3.6% and Intel shares (INTC) slipped 0.8%.

Micron's stock has been on a tear recently after notching its first close above $1,000 earlier this week. And analysts have been raising their price targets for the company, saying that the chip maker has a number of catalysts. Nvidia's (NVDA) drop of new personal-computing chips that support higher memory capacity, for instance, could be a boon for Micron.

See also: As Micron's stock blows past $1,000, Wall Street sees more gains in store

Itau BBA analyst Stephano Gabriel recently told MarketWatch that he continues to see confirmation that the bottleneck for memory is "intensifying," which is a good thing for Micron, as it's giving investors more confidence that high memory prices aren't simply a cyclical phenomenon.

He said that more expected long-term agreements at currently elevated memory prices could help the company lock in predictable revenue.

"This helps ease peak-cycle concerns," he said.

Read more: Why Broadcom's stock is falling so hard after earnings

-Hannah Pedone

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

06-04-26 1700ET