Key Highlights

● Micron Technology (MU) closed at $1,053.98 on Monday, down from $1,082.28, two days before its Earnings report.

● Reports that OpenAI paused Training of some frontier models raised questions about Demand for memory chips used in AI accelerators.

● Baird raised its price target to $1,520, JPMorgan predicted a beat-and-raise quarter, and DA Davidson said $2,000 is not unreasonable.

● Micron reports after the close on Wednesday, September 30, and Options pricing points to a large expected move.

Micron Technology (NASDAQ:MU) slid on Monday, September 28, closing at $1,053.98 against $1,082.28 on Friday, a decline of about 2.6%, as chip stocks were hit by reports of an AI training pause. The timing made the move notable. Micron reports its quarterly earnings after the close on Wednesday, September 30, just two days later.

The OpenAI Pause Hit Memory Stocks

Over the weekend, reports said OpenAI had paused training of some frontier models. Chip stocks fell sharply on Monday. For Micron, which makes the high-bandwidth memory chips used in AI accelerators, that raised questions about how steadily AI developers will keep building out data centers.

Memory and storage names were among the hardest hit. Sandisk (NASDAQ:SNDK), Western Digital (NASDAQ:WDC) and Seagate (NASDAQ:STX) also fell, and Qualcomm (NASDAQ:QCOM) and Arm dropped by more than 7%. Nvidia (NASDAQ:NVDA) bucked the trend after announcing a $150 billion buyback increase.

A Big Run into Earnings

Micron heads into earnings after a spectacular year. Earnings previews point to expectations of roughly $50 billion in Revenue and about $31.50 a share and options pricing points to a large expected move after the report. Consensus figures are averages of analyst forecasts, and markets often react as much to guidance as to the headline numbers.

Analysts Are Still Bullish

Wall Street has not lost faith. RW Baird's Tristan Gerra raised his price target to $1,520, JPMorgan's (NYSE:JPM) Harlan Sur predicted a beat-and-raise quarter on tight DRAM and NAND supply, and DA Davidson's Gil Luria said $2,000 a share is not unreasonable. These are the analysts' own views and targets, not guarantees.

The wider market was a tough backdrop for any stock. The 10-year Treasury Yield climbed to about 5.24%, its highest level since 2007, and the 30-year yield reached its highest since 2004. Higher yields reduce the present value of profits expected far in the future, which tends to weigh on growth stocks. Stocks finished the day lower: the S&P 500 sank 59.72 points to 7,683.69, the Dow slid 347.11 points to 51,481.51, and the Nasdaq Composite lost 248.34 points to 26,820.38.

Guidance Will Matter More than the Headline Numbers

Wednesday after the close is the key moment. Investors will focus on Micron's revenue and profit versus expectations, its guidance for the next quarter and any comments on AI memory demand after the OpenAI pause. Commentary on pricing for high-bandwidth memory will be closely read.

The week ahead includes JOLTS and consumer confidence on Tuesday, PCE Inflation on Wednesday, ISM Manufacturing on Thursday and the September jobs report on Friday, each of which could move yields. Both company results and macro data could drive big moves in chip stocks this week.