Micron Technologies led the semiconductor sector higher on Thursday, gaining 4.52% to close at $991.64 after announcing a new round of investments to strengthen the US semiconductor supply chain and expanding its long term capital spending plans through 2035.
The announcement came as South Korea’s SK Hynix began trading in the Nasdaq pre market ahead of its official listing under the ticker SKHYV next Monday. The move is expected to help narrow the valuation premium traditionally enjoyed by US listed peers such as Micron. According to HSBC, Micron has traded at an average 35% valuation premium to SK Hynix over the past 13 years.
Micron said it will invest $500 million in Taiwan based GlobalWafers to expand wafer manufacturing capacity in Texas. The company also increased its planned US investment to approximately $250 billion by 2035, raising its previous commitment by around $50 billion in response to strong AI driven demand for memory products.
Investor sentiment improved following the announcement. Bank of America reaffirmed its Buy rating after UBS recently raised its price target to $1,500. Analysts believe the market continues to underestimate Micron’s shift toward longer duration, non cancellable supply agreements, making its memory business less dependent on traditional cyclical demand.
Semiconductor stocks have experienced significant volatility in recent sessions. The sector underwent two sharp rounds of profit taking before rebounding on Thursday, with Micron falling as much as 22% from its June record high before recovering.
The broader Philadelphia Semiconductor Index climbed 11% in June but gave back more than 11% over the following two weeks, even as the Magnificent Seven hyperscalers recovered part of their previous losses. The recent price action suggests a genuine sector rotation rather than short term market noise.
Morgan Stanley noted that momentum across semiconductor stocks has weakened while capital has started rotating into AI hyperscalers that had previously underperformed. The bank believes these companies could benefit from improved capital expenditure discipline, although investor sentiment remains mixed.
Despite the recent rotation, memory leaders such as Micron and SK Hynix remain among the strongest beneficiaries of the AI investment cycle. Investors are now seeking evidence that heavy spending by hyperscalers will translate into stronger earnings growth before assigning significantly higher valuations to that segment of the market.
Technical Analysis
On the 4 hour chart, Micron continues to trade within a well established ascending trendline that has supported the rally since late March. The trendline was successfully tested between July 7 and July 8 in the $890 to $920 area, which proved to be a strong buying opportunity. The stock is now trading near $992 after reaching an intraday high of $1,035 on Thursday.
The first major resistance is located around $1,025, followed by a second key resistance zone near $1,095. A short term descending trendline intersects around $1,070, making this an important level to monitor. A decisive breakout above $1,070, followed by a move beyond $1,095, could pave the way for another test of the all time high.
On the downside, the ascending trendline remains the primary support and continues to define the broader bullish structure.
Momentum indicators warrant caution. A clear bearish divergence has developed on both the RSI and MACD since late April on the 4 hour chart. While price has continued to post higher highs, momentum has failed to confirm the move, suggesting weakening upside strength and increasing the risk of higher volatility or a deeper corrective phase.
