Micron Options Holders Exit $140 Calls as Chipmaker Fails to Impress Investors
$Micron Technology (MU.US)$ is seeing a sell-off in its $140 call options expiring through next week as the stock price falls steeply below that strike price after the chipmaker failed to impress investors.
The company that makes high performance DRAM, NAND and NOR memory and storage products used in artificial intelligence (AI) applications, forecast that revenue for the fourth quarter could reach $7.6 billion, plus or minus $200 million. That matched the average estimate of analysts polled by Capital IQ.
The stock price is retreating after more than doubling over the past year amid the frenzy for everything AI-related. The investor enthusiasm was fueled by expectations that hyperscalers including $Alphabet-A (GOOGL.US)$ , $Microsoft (MSFT.US)$, $Amazon (AMZN.US)$, $Meta Platforms (META.US)$ and $Apple (AAPL.US)$ will need to buy more memory chips as they upgrade to $NVIDIA (NVDA.US)$'s graphic processing units that power AI applications.
But while Nvidia has been raising its guidance, blowing past analysts' estimates, Micron's outlook is just in line with expectations. That fueled the debate whether the DRAM maker's stock rally was justified given that Capital IQ data shows that Micron shares are now trading at 118 times its estimated 2024 earnings, compared with Nvidia's 47 times.
Micron options trading reached more than 570,000 contracts as of 11:48 a.m. in New York Thursday, landing the stock at the fifth spot for the most heavily traded stock options, behind Nvidia, $Tesla (TSLA.US)$ , Amazon and Apple.
About half of the volume are in $140 call options expiring tomorrow and next Friday, data compiled by moomoo showed. The price of the call expiring tomorrow plunged 97% to 33 cents as the stock price sinks further below that strike price. Micron shares were down 6.5% at $133.05.
Despite the stock sell-off, analysts remain optimistic on the company's outlook including those from Bank of America and Wells Fargo, who reiterated their buy and overweight recommendation on the stock. The 60-minute technical indicators turned slightly to Micron's favor, with eight of the 15 gauges tracked by moomoo now flashing positive signals.
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Former editor at Bloomberg, then Lazard Asset Management. Posts aren’t investment advice. Views are just mine.
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White_Shadow : micron is and likely will remain the biggest "Coat-Tail Rider" of A.I Bull King $NVIDIA (NVDA.US)$ and the more generalized A.I fever currently underway, it's still early yet in the evolution of the movement. Still lot of runway...![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
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Space Dust : when you look at the daily top gainers, are you really "PROVIDING A SERVICE"
when you mention other things? wouldn't the " chops" of analysts to be daily gains?
and if you are experienced, can't you at least pick, one a week, 40% at least daily gainer?
this is a TRADING APP..
day trading makes money, the purpose of trading is money right?
my first week, I picked BCG, among others , NOTHING you mention comes ANYWHERE close to daily gain winners.
wouldn't that be something people would like to be in on?
I get, these are ' viable' .. but HOME RUNS. are nice, just like base hits.
why not focus on both?
Ace74374147 :
Paul Anthony : very helpful thanks