Micron and Other Chip Stocks Fall on Tesla's Spending Cut and AI Slowdown Fears

Micron and other chip stocks fell Thursday, dragged down by two separate developments that revived investor anxiety about the pace of AI-related spending. The first was Tesla trimming its capital spending forecast for the year, a move that rattled sentiment across companies tied to AI infrastructure buildouts. The second was a round of comments from Nvidia's chief executive suggesting that available capital for further growth in the AI cloud market is becoming scarce.

A slide that's hit the whole sector

The declines weren't limited to Micron. Chip stocks broadly, including Nvidia and Broadcom, resumed a slide that has weighed on the sector in recent sessions, as investors weigh whether the torrid pace of AI infrastructure spending from hyperscalers and chipmakers alike can be sustained. Rising Treasury yields added further pressure, making growth-oriented tech stocks less attractive relative to safer assets.

Micron's stock has also been under pressure from company-specific concerns, including reports of a breakthrough in DRAM production from China's CXMT that could eventually challenge established memory-chip makers, as well as labor negotiations in Taiwan that have created localized supply-chain headwinds. Combined with the broader AI-spending jitters, those factors have left Micron down roughly 25% from its June high, even as some analysts argue the selloff has been overdone given the company's underlying demand outlook.