Chip makers haven’t had an easy run of things lately. It’s been one of the hardest-hit sectors among tech stocks, mostly because an economic downturn looks like it could have very real problems for consumer electronics. That, in turn, would hit chip makers like Micron Technologies (NASDAQ:MU) hard. In Thursday afternoon’s trading, though, it got a significant boost up and also provided a halo effect for several other major chip producers.
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The last few days were particularly troublesome for Micron investors as a “cybersecurity review” from China hit Micron. If that sounds like some kind of retaliatory gesture for TikTok of late, you’re not alone on that front. At any rate, the Chinese government—specifically the Cyberspace Administration of China—is reviewing several Micron products. The Cyberspace Administration is specifically looking for “…cybersecurity risks caused by hidden product problems” along with “ensuring the security of key information infrastructure supply chains…”
This may have concerned many investors, but Christopher Danely with Citi pointed out something important. China does represent 15% of Micron’s sales, but it’s the dynamic random access memory cycle that really gives Micron its edge. That was apparently enough for much of the chip sector, whose numbers climbed as a result. Some more so than others, certainly; AMD (NASDAQ:AMD), Nvidia (NASDAQ:NVDA), Qualcomm (NASDAQ:QCOM), and Intel (NASDAQ:INTC) gained in Thursday’s trading, though each was up less than 1%.
The differences among these stocks, however, are all much more pronounced. Intel, for example, is only rated a Hold by analyst consensus. It’s also the only one of the five that offers a downside risk; its average price target of $28.30 means it has a 13.97% downside potential. Meanwhile, Qualcomm is rated a Moderate Buy. However, it has the strongest upside potential of the five listed. Its average price target of $145.80 gives it 18.32% upside potential.
