Micron Technology Shares Drop Amid Google AI Concerns
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
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Should l Buy GOOGL?
Source: Fool
- Stock Decline: Micron Technology's shares have fallen 12% over the past week due to investor concerns that Google's new AI compression algorithm could reduce demand for advanced memory processors, compounded by worries over the company's $25 billion capital expenditures.
- AI Model Impact: Google's TurboQuant algorithm, which reportedly reduces memory requirements for large language models by at least 6X, has sparked panic among Micron investors, although some analysts suggest this could actually increase memory demand.
- Economic Outlook Worries: Concerns about a potential U.S. recession have risen due to the ongoing war with Iran, with economists raising the likelihood of a downturn in the next 12 to 18 months, further exacerbated by the OECD's inflation forecast of 4.2% this year.
- Strong Earnings Contrast: Despite these challenges, Micron reported a remarkable second quarter with earnings per share of $12.20, significantly surpassing Wall Street's estimate of $8.80, and a 196% revenue surge to $23.9 billion, indicating a robust position in the AI infrastructure market.
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Analyst Views on GOOGL
Wall Street analysts forecast GOOGL stock price to rise
33 Analyst Rating
26 Buy
7 Hold
0 Sell
Strong Buy
Current: 280.920
Low
305.00
Averages
374.25
High
400.00
Current: 280.920
Low
305.00
Averages
374.25
High
400.00
About GOOGL
Alphabet Inc. is a holding company. The Company's segments include Google Services, Google Cloud, and Other Bets. The Google Services segment includes products and services such as ads, Android, Chrome, devices, Google Maps, Google Play, Search, and YouTube. The Google Cloud segment includes infrastructure and platform services, collaboration tools, and other services for enterprise customers. Its Other Bets segment is engaged in the sale of healthcare-related services and Internet services. Its Google Cloud provides enterprise-ready cloud services, including Google Cloud Platform and Google Workspace. Google Cloud Platform provides access to solutions such as artificial intelligence (AI) offerings, including its AI infrastructure, Vertex AI platform, and Gemini for Google Cloud; cybersecurity, and data and analytics. Google Workspace includes cloud-based communication and collaboration tools for enterprises, such as Calendar, Gmail, Docs, Drive, and Meet.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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