Micron stock falls amid semiconductor weakness and analyst downgrade

Investing.com -- Micron Technology (NASDAQ: MU) stock closed 3% lower on Tuesday as semiconductor stocks weakened due to ongoing trade tensions with China and following an analyst downgrade.

New Street Research downgraded the memory-focused chipmaker to neutral from buy, while maintaining a price target of $190. The downgrade comes despite expectations that rising demand for high-bandwidth memory could lead to "a series of earnings beats over the coming quarters."

According to the research firm, Micron currently "trades at peak multiples," and they anticipate that potential earnings beats will likely be "offset by continued multiple compression, consistent with past cycles," potentially resulting in "muted stock performance" going forward.

The broader semiconductor sector faced pressure on Tuesday amid escalating concerns about U.S.-China trade relations and their potential impact on chip companies with significant exposure to the Chinese market.

New Street Research indicated a preference for Taiwan Semiconductor Manufacturing Co. over Micron, noting that it "offers AI exposure comparable to Micron’s but faces less de-rating risk."

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