Chipmaking stocks are bleeding post Micron Technology, Inc's MU cautious Q4 guidance.
Piper Sandler saw DRAM, and NAND pricing decline, affecting Micron as mobile and notebook end-markets face continued weakness based on inSpectrum's June monthly memory contract pricing data.
Piper Sandler also shared how semiconductor equipment stocks may become range-bound in a decelerating or declining memory CAPEX environment.
It pointed out Lam Research Corp LRCX with higher relative exposure to memory CAPEX, followed by Applied Materials, Inc AMAT, KLA Corp KLAC, and ASML Holding N.V. ASML.
Piper Sandler had downgraded Micron, citing its dependence on DRAM, battling price declines for most configurations, and significant exposure to consumer-like markets such as PCs and mobile, which get hammered during an economic slowdown.
Mizuho also shared a similar opinion.
Earlier this month, Advanced Micro Devices, Inc AMD warned against a slowdown in the PC market after two solid years amid the pandemic.
Gartner also shared how China's economic slowdown and inflation-led drop in consumer spending will likely weigh on the global shipments of computers and smartphones in 2022. All of which will affect companies ranging from Nvidia Corp NVDA to Apple Inc AAPL and Microsoft Corp MSFT, set to announce their quarterly earnings starting in July.
Premarket Price Actions: MU traded lower by 4.45% at $52.82, ASML down by 3.93% at $457.20, TSM down by 3.6% at $78.81, United Microelectronics Corp UMC shares falling by 3.1% at $6.56, Western Digital Corp WDC down 3.64% at $43.20, Nvidia -1.65% at $149.30, Qualcomm Corp QCOM -1.71% at $125.55, and AMD -1.75% at $75.13.
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