The Real Reason Micron Is Sinking NVIDIA Stock
Nvidia (NASDAQ: NVDA) is falling after memory chip manufacturer Micron Technology (NASDAQ: MU) reported a much weaker outlook than expected for its summer quarter. Micron said there's an oversupply of consumer electronics on the market, confirming worries that have been mounting for months that the work-from-home spending spree on new devices is coming to an end. Given that Nvidia derives more than 40% of its sales from video game graphics cards, a consumer-facing chip type, Micron's news has many investors feeling glum.
Some stock market analysts were also quick to call out the relationship between the two companies to justify Nvidia's fall alongside Micron. But the real reason Nvidia is sinking along with Micron might be far simpler: Many don't fully understand the relationship between the two companies.
First, a few details: Micron reported a 16% year-over-year increase in sales to $8.64 billion in Q3 fiscal 2022 (the three months ended June 2). In addition, adjusted earnings per share increased 38% year over year. So far, so good -- right?
Source Fool.com
