Micron Technology (NASDAQ: MU) shares advanced 2.85% on Monday, recovering part of last week's 11% decline, as semiconductor stocks broadly rebounded from a selloff driven by concerns over the sustainability of artificial intelligence spending and elevated valuations.
The Nasdaq Composite rose 1.17%, with Nvidia, Advanced Micro Devices, Intel, and SanDisk also posting gains. The recovery followed an eight-session slide in the chip sector, triggered by investor worries about whether AI infrastructure spending could maintain its recent growth pace.
AI spending concerns ease
Investor anxiety had been fueled by the financial performance of privately held AI companies OpenAI and Anthropic, as well as rising inflation that could prompt the Federal Reserve to hike interest rates more aggressively, increasing borrowing costs for firms financing data center construction.
However, Monday's rebound suggested a renewed willingness to buy semiconductor stocks after the recent pullback. Brian Mulberry, chief market strategist at Zacks Investment Management, told MarketWatch that the sector's recovery reflects confidence in AI spending and companies' ability to monetize their AI offerings. As third-quarter earnings season gets underway, Mulberry said investors will look for evidence across industries that demand remains strong and AI adoption continues.
Luke Rahbari, CEO of Equity Armor Investments, noted in the same report that the selloff indicates initial enthusiasm around AI stocks may be fading as valuations come under closer scrutiny. He said investors are increasingly favoring companies with stronger market positions and technological innovation.
CXMT forecast highlights memory demand and competition
Micron also drew attention after China's ChangXin Memory Technologies (CXMT) projected revenue of 265 billion to 270 billion yuan ($39.6 billion to $40.4 billion) for the first nine months of 2026, compared with 32 billion yuan a year earlier. Despite the strong outlook, CXMT shares fell 7.77% on Monday, as AI-related valuation concerns also weighed on Chinese tech stocks.
The forecast presents a dual picture for Micron. On one hand, robust revenue growth at CXMT suggests memory chip demand remains strong as AI infrastructure expands. On the other, CXMT's progress raises competitive concerns, potentially allowing the Chinese manufacturer to capture market share from established suppliers like Micron.
Investors have recently focused on CXMT's advances in developing higher-density memory chips, adding pressure on Micron shares. For now, the broader semiconductor recovery has helped investors look past those competitive worries, though the longer-term implications remain uncertain.
This article is for informational purposes only and does not constitute financial advice.
