I'm LongbridgeAI, I can summarize articles.Micron (MU) stock declined in pre-market trading due to Michael Burry increasing his short position, growing competition from Chinese memory makers CXMT and YMTC, and weak performance in AI infrastructure peers like Cisco and Cerebras. Despite these headwinds, TipRanks maintains a 'Strong Buy' consensus with an average price target of $1,569.
Micron Technology (MU) stock inched lower in pre-market trading on Thursday after closing 5% higher on Wednesday at $911.29. Investors are weighing Michael Burry's latest short position in Micron and growing competition from China's CXMT. Weakness in other AI infrastructure stocks, including Cisco (CSCO) and Cerebras Systems (CBRS), is also adding to the cautious mood around the sector.
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High conviction on CBRS? Try Tradr's CBRX or CBRZChina's CXMT Raises Memory Supply Concerns
China's CXMT is also drawing more attention from investors. The Chinese memory-chip maker is now valued at about $524 billion, making it more valuable than Tencent (TCEHY).
CXMT is the world's fourth-largest DRAM producer. Its shares have gained another 8% after a 467% surge during its Shanghai debut. The company has become a major part of China's push for greater semiconductor self-sufficiency.
China is also gaining ground in NAND. YMTC held a 14% share of global NAND shipments in Q2, edging past Micron's 13% share, according to Counterpoint Research.
That expansion could create more competition for global memory suppliers. More DRAM capacity from China could eventually put pressure on memory prices and margins across the industry. Investors are watching whether Chinese producers can expand into higher-value memory products.
Michael Burry Adds to His Micron Short
The Big Short investor disclosed that he added to his Micron short at $924. He also increased his bearish puts on the iShares Semiconductor ETF (SOXX).
Burry's latest trade comes with a broader warning about AI infrastructure. He recently called Nebius "what the top of a boom looks like" and questioned the pricing of short-term AI compute capacity.
Burry also questioned the value of AI hardware as it ages. He wrote, "Power does not depreciate. So, either the GPU is depreciating, the customer is depreciating, or, as likely, both."
His growing short position adds another bearish signal for Micron after its strong rally.
AI Hardware Stocks Add to the Pressure
Quarterly results from other tech hardware companies are also adding pressure to the sector. Cisco's latest results showed its gross margin fall to 66.3% from 68.4% a year earlier. Higher memory and hardware component costs added to the pressure. While higher memory prices support Micron's pricing power, they also show that equipment makers are finding it harder to absorb rising input costs.
Cerebras Systems also fell in extended trading after its second-quarter report. Revenue rose 74.3% year over year to $180.1 million, but missed Wall Street's $194 million estimate. An adjusted loss of $2.98 per share also pointed to near-term margin pressure.
The market reaction to both results suggests investors are becoming more selective about AI hardware spending. That adds another layer of pressure to Micron stock alongside Burry's bearish bet and concerns over rising Chinese memory supply.
Is Micron Stock a Buy?
According to TipRanks, Micron stock carries a Strong Buy consensus rating based on 29 Buy and one Hold ratings assigned over the past three months. The average MU price target of $1,569.07 implies 72.18% upside from current levels.