Micron Technology's stock price plummeted by 7% intraday.
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The computer memory chip manufacturer continued its recent decline as BNP Paribas Exane warned that the stock would continue to underperform other artificial intelligence-related stocks.
Karl Ackerman downgraded the stock's rating from outperforming the market to underperforming the market by two levels, becoming the only analyst to recommend selling the stock. He also lowered the target price from $140 to $67, the lowest target price in the market. In contrast, over 90% of analysts gave a &#34;buy&#34; rating, with an average target price of $156, more than 80% higher than the current price.
He wrote, &#34;While some investors correctly predicted the downside risks facing the recent performance, we believe that Micron's performance will lag behind its artificial intelligence peers until 2025.&#34; He added that oversupply of High Bandwidth Memory (HBM) chips will lead to a faster-than-expected market decline in the average selling price of traditional Dynamic Random Access Memory (DRAM).
The stock fell by 7.20% to $84.12 at one point. It approached its lowest closing price since February, down over 40% from its peak in June. Ackerman wrote that even with this decline, &#34;the current level of risk-return ratio remains unfavorable.&#34; Micron has remained flat this year, while the Philadelphia Semiconductor Index has grown by 16% and Nvidia has risen by nearly 140% during the same period.
Micron's HBM chips are expected to benefit from the demand brought by artificial intelligence, although some believe this momentum is somewhat excessive. In the latest earnings released in late June, the company's revenue expectations did not meet some investors' high expectations.
The company is set to announce its fourth-quarter earnings on the 25th of this month.
Editor: Li Tong, Source Global Market Report

Analysts warn that the company is facing overcapacity

- Micron Technology's stock price plummeted by 7% during trading, continuing its recent decline following a warning from BNP Paribas Exane that it would underperform other AI-related stocks. Analyst Karl Ackerman downgraded the stock to underperform, setting the lowest target price in the market at $67, citing oversupply in High Bandwidth Memory (HBM) chips affecting DRAM prices.
- Despite some investors predicting performance risks, Ackerman believes Micron will lag behind AI peers until 2025. The stock hit its lowest close since February, dropping over 40% from its June peak. Micron's HBM chips are expected to benefit from AI demand, although concerns about overvaluation persist.
- Micron's stock has remained flat this year while the Philadelphia Semiconductor Index grew by 16% and Nvidia surged nearly 140%. Micron's revenue outlook fell short of high expectations in its latest earnings report, with Q4 results set for release on the 25th of this month.

Micron Tech fell 7% overnight, with analysts significantly cutting the target price from $140 to $67