What Happened?
A number of stocks jumped in the afternoon session after Commerce Secretary Howard Lutnick told The Wall Street Journal the Trump administration opposes Apple buying Chinese memory chips.
Lutnick said Washington is “not in favor” of Apple using Chinese memory and that he had conveyed that “plainly,” which would keep more of the shortage with Micron, Samsung, and SK hynix.
That news followed Sandisk’s promising Analyst/Investor Day updates from the previous week. The company noted during the session that from fiscal 2028 through 2030 it expects mid-to-high-teens revenue growth, non-GAAP gross margins of about 80%, and non-GAAP operating margins of about 75%, and that New Business Model agreements with eight customers cover about half of its bits in fiscal 2027 and about two-thirds in fiscal 2028. Those figures were interpreted as a sector signal that AI-related NAND and DRAM tightness can last for years.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Memory Semiconductors company Micron (NASDAQ: MU) jumped 5.8%. Is now the time to buy Micron? Access our full analysis report here, it’s free.
- Memory Semiconductors company Western Digital (NASDAQ: WDC) jumped 5.4%. Is now the time to buy Western Digital? Access our full analysis report here, it’s free.
Zooming In On Micron (MU)
Micron’s shares are extremely volatile and have had 66 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 5 days ago when the stock gained 6.9% on the news that a wave of upbeat earnings reports and bullish forecasts from key industry players signaled robust and sustained demand for artificial intelligence technology.
The rally was sparked by strong quarterly results from several AI-related firms, reinforcing investor confidence in the sector. Super Micro Computer, a seller of servers and other AI equipment, saw its shares jump after its earnings per share came in 84% higher than expected and it provided a revenue forecast that topped estimates. Similarly, CoreWeave, which provides cloud computing for AI systems, rallied after its sales forecast also exceeded expectations. This positive sentiment echoed globally, with Asian markets gaining as traders bought into AI- and semiconductor-related shares. The optimism is further supported by fundamental data, such as a reported 155% year-over-year surge in South Korea's semiconductor exports for early August. AI racks consume GPUs, CPUs, high-bandwidth memory, and storage. When a large server OEM and a major AI cloud operator both lift the path of future shipments, investors typically reprice the chip makers that supply those systems which helps explain the gains in Nvidia, AMD, and Intel.
Micron is up 227% since the beginning of the year, but at $1,030 per share, it is still trading 10.7% below its 52-week high of $1,154 from June 2026. Investors who bought $1,000 worth of Micron’s shares 5 years ago would now be looking at an investment worth $14,560.
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