Shares in flash memory chipmaker Western Digital tumbled on Thursday after Goldman Sachs downgraded the company to sell, dragging down Micron Technology as well. And while shares in MU and WDC stock fell, graphics chipmaker Nvidia also dropped on oversupply concerns and a low rating for NVDA stock.
Goldman Sachs analyst Toshiya Hari in a report said "multiple sources" told him that flash memory chip suppliers are offering below cash-cost prices in an attempt to work down inventories amid "a weak macroeconomic backdrop."
Meanwhile, HSBC analyst Frank Lee initiated coverage of with NVDA stock a "reduce" rating. He cited expectations for a near-term chip inventory correction and demand uncertainty.
Nvidia makes chips for high-performance computer servers in data centers as well as automobiles.
WDC Stock Tumbles
On the stock market today, WDC stock tumbled 10.1% to close at 32.21. MU stock fell 4.7% to 52.04. NVDA stock dropped 4.1% to finish at 169.52.
In addition to chips, Western Digital also makes hard disk drives for personal computers and computer servers.
Fiscal first-quarter earnings for MU stock are due Dec. 21. Micron in November said it would slash production of memory chips in fiscal 2023 because of weak demand.
Boise, Idaho-based Micron cut production of DRAM and Nand flash memory chips. DRAM chips act as the main memory in PCs, servers and other devices. Nand flash chips provide longer-term data storage.
WDC stock has plunged 49% in 2022. Nvidia stock has retreated 43%. Micron stock is down 44%.
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