Why Is Micron Stock Still Falling?

Micron (NASDAQ: MU) banal sold disconnected for a 2nd consecutive time Thursday -- and I person to say, the logic present seems weird.

Shares of the shaper of machine representation chips slipped 3.2% done 10:15 a.m. ET aft Taiwan Semiconductor Manufacturing Company (NYSE: TSM) blew past expert estimates successful its Q2 net report, increasing profits 77% twelvemonth implicit twelvemonth -- but warned investors volition walk upwards of $60 cardinal connected superior concern this year, versus anterior forecasts of astir $54 billion.

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Good quality for TSMC isn't atrocious quality for Micron

Investors are punishing TSMC with a 1.5% sell-off contiguous contempt the bully net quality -- worrying TSMC's spending excessively much, and hurting its escaped currency travel successful the process. But here's the thing: Many of the chips TSMC is producing are CPUs and GPUs for artificial quality customers, and these chips volition request to beryllium paired with Micron's HBM representation chips to execute their functions.

In different words, much concern and much spot accumulation from TSMC should increase request for Micron chips and summation Micron's profits.

Good quality for Micron is... bully quality for Micron

That's not all. While Micron's being punished arsenic a corollary to investors punishing TSMC today, Micron has immoderate independently bully quality of its ain to report. Namely, Micron has signed Strategic Customer Agreements to proviso representation chips to 7 "key Tier 1 suppliers" to the planetary automotive industry: Qualcomm, Visteon, HARMAN, JOYNEXT, DENSO, Astemo, and Hyundai Mobis.

Micron says the proviso agreements springiness certainty regarding aboriginal orders and pricing for the automotive chips it produces. They should besides reassure investors that the nett margins Micron earns connected these products volition enactment precocious for years.

This is not a crushed to merchantability Micron stock. It's a crushed to bargain Micron stock.

Should you bargain banal successful Micron Technology close now?

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