Micron Technology Inc. (NASDAQ:MU) stock extended its decline Thursday as investors pulled back from semiconductor and memory stocks amid a broader selloff in artificial intelligence-related investments following the U.S. midterm elections.
Micron fell about 3% in premarket trading after losing nearly 7% Wednesday.
Memory and storage rivals SK hynix Inc. (NASDAQ:SKHY), Western Digital Corp. (NASDAQ:WDC) and Seagate Technology Holdings Plc. (NASDAQ:STX) also faced selling pressure after falling roughly 5% to 8% Wednesday.
The iShares Semiconductor ETF (NASDAQ:SOXX) dropped nearly 3% in premarket trading after losing about 3% Wednesday.
The weakness follows a warning from Yorkville Ives Partner and tech bull Dan Ives, who said semiconductor stocks could fall another 10% to 12% during the technology pullback.
However, Fundstrat's Tom Lee called the AI selloff an "overreaction." He sees potential for a 20% technology rally if hedge funds return to the sector before year-end.
Midterm Elections Spark Chip Stock Selloff
A Bloomberg report said Thursday that the U.S. midterm elections triggered one of the sharpest market rotations she has seen in 18 years of trading Asian equities.
The report highlighted a 20-percentage-point gap between Japanese consumer and technology stocks and a 10-point divergence between South Korea's Kospi and the Hang Seng Tech Index.
AI semiconductor and supply-chain stocks faced heavy selling pressure as investors reduced exposure to crowded technology trades.
Results from Qualcomm Inc. (NASDAQ:QCOM) and Arm Holdings plc (NASDAQ:ARM) added to concerns, with capacity constraints and slowing growth momentum weighing on sentiment.
Hedge funds had already reduced technology exposure in October following two difficult months. Investors also sold about $2 billion in Korean equities during a roughly 6% market decline, the report added.
Micron's Memory Market Sees Explosive Growth
Despite the selloff, Counterpoint Research reported Thursday that AI demand continues to drive strong memory pricing.
Global DRAM revenue surged 369% year over year in the third quarter, while bit shipments rose just 4% sequentially.
Samsung Electronics Co. Ltd. (OTC:SSNLF) led the market with a 38% revenue share.
SK Hynix increased revenue more than 40% sequentially, while Micron recorded slower growth than its two larger rivals.
China's ChangXin Memory Technologies (CXMT) saw its market share decline to 9% from 10%.
Counterpoint expects tight supply and premium HBM4 products to support memory prices. Major new manufacturing capacity is not expected until 2028.
Meanwhile, agentic AI is fueling demand for conventional memory. DDR revenue jumped about 500%, while LPDDR revenue climbed nearly 400% year over year.
Counterpoint expects server demand to push DRAM prices higher in 2027, although rising costs could pressure consumer devices.
MU Price Action: Micron shares fell 3.17% to $770 in premarket trading Thursday, according to market data.
