Micron Technology Inc. (MU) stock fell about 2% Thursday as technology stocks declined amid broader market weakness. The Nasdaq dropped 0.68%, while the S&P 500 lost 0.37%. The technology sector also struggled, falling 0.8%.
Micron's decline came as investors reduced exposure to technology stocks and shifted toward defensive sectors. Only three of the 11 S&P 500 sectors advanced Thursday.
The market's advance-decline ratio stood at 0.4, indicating that declining stocks outnumbered advancing stocks. Energy led gains with a 2.96% increase, followed by consumer staples, which rose 1.41%.
Despite Thursday's pullback, Micron shares have surged 441.38% over the past 12 months. The sharp rally may have encouraged some investors to lock in profits.
Analyst Sees Years Of AI-Driven Growth
Separately, D.A. Davidson analyst Gil Luria maintained a Buy rating on Micron on Wednesday. He also raised his price forecast to $3,000 from $2,100.
Luria believes Micron could sustain its growth for another three to five years, a prospect he says investors have yet to fully recognize.
He expects demand for memory chips to exceed supply through 2027 and 2028 as artificial intelligence systems require more memory capacity.
Luria believes AI is transforming memory chips from a highly cyclical commodity into a critical component of AI infrastructure. This shift could make demand more resilient and reduce the industry's traditional boom-and-bust cycles.
His $3,000 price forecast implies a valuation of about 19 times projected fiscal 2027 earnings of $158 per share.
Micron Technical Analysis
Micron remains above its major moving averages, suggesting its longer-term uptrend is intact.
The stock trades 2.6% above its 20-day simple moving average (SMA) of $1,036.98. It also stands 9.2% above its 50-day SMA of $973.66 and 52.3% above its 200-day SMA of $698.06.
However, momentum indicators suggest the rally may be losing strength.
The moving average convergence divergence (MACD) indicator remains below its signal line. Its negative histogram also points to weakening short-term buying momentum.
Traders are watching resistance at $1,108.50. A move above that level could signal renewed buying interest.
On the downside, support stands at $902.50. A decline toward that level would present a more significant test of Micron's uptrend.
Analyst Outlook
Micron carries a consensus Buy rating, with an average analyst price forecast of $1,605.45.
Recent analyst actions include D.A. Davidson's increase to $3,000 on Oct. 7, Mizuho's increase to $1,400 on Oct. 1 and Morgan Stanley's maintained $1,200 forecast on Oct. 1.
The stock trades at a price-to-earnings ratio of 14.6.
ETF Exposure
Micron is a major holding in several technology-focused exchange-traded funds.
These include the iShares Semiconductor ETF (SOXX), with an 8.78% weighting, the Invesco PHLX Semiconductor ETF (SOXQ), at 8.80%, and the State Street SPDR NYSE Technology ETF (XNTK), at 8.87%.
As a major holding, Micron could see additional buying or selling pressure from changes in these funds' investor flows.
MU Price Action
MU Stock Price Activity: Micron Technology shares were down 2.03% at $1065.88 at the time of publication on Thursday, according to market data.
