Shares of Micron Technology (MU) fell sharply on Friday as renewed uncertainty surrounding Nvidia’s AI chip sales to China triggered a broader semiconductor selloff and prompted investors to lock in profits following Micron’s massive recent rally.
Micron shares dropped roughly 7.3% during the session after climbing to a fresh all-time high near $818 earlier in the week.
The stock recovered some of the losses and was trading down 4.4% at the time of writing.
The stock had surged above the $800 level on Monday before momentum reversed as broader market sentiment weakened across technology and semiconductor stocks.
The decline came after reports suggested that expected purchases of Nvidia’s H200 artificial intelligence chips by major Chinese companies had failed to materialize following the Trump-Xi summit in Beijing.
Shares of Nvidia also fell, declining about 4% after investors reacted negatively to the developments surrounding potential China-related AI chip demand.
Nvidia-China developments pressure semiconductor stocks
Investor concerns intensified after reports indicated that no agreements were reached for Chinese companies to purchase Nvidia’s H200 chips during the summit.
Earlier reports had suggested the US would permit Nvidia to sell the advanced AI chips to 10 Chinese firms.
However, subsequent reports indicated that no actual sales took place.
According to The Wall Street Journal, President Donald Trump dismissed concerns about the lack of deals, saying Chinese buyers did not purchase the chips “because they chose not to. They want to try and develop their own.”
Further reporting suggested that major Chinese technology companies, including Alibaba Group and ByteDance, were not authorized by the Chinese government to complete purchases.
The developments fueled concerns that China may increasingly prioritize building a domestic semiconductor industry rather than relying on advanced US chipmakers.
While analysts noted that future agreements could still emerge, the uncertainty added pressure across AI-linked semiconductor stocks that have rallied aggressively in recent months.
The broader semiconductor sector also weakened Friday, with shares of Intel, Advanced Micro Devices, and Qualcomm moving lower alongside Micron and Nvidia.
AI-driven rally faces valuation pressure
Despite Friday’s decline, Micron remains one of the semiconductor industry’s strongest performers this year.
The stock has gained roughly 80% over the past two months as investors poured into companies viewed as beneficiaries of expanding AI infrastructure spending.
Demand for high-bandwidth memory, NAND flash, and DRAM products used in AI data centers has fueled much of the bullish sentiment surrounding Micron.
However, the pace of the rally has also begun generating increasing caution among investors.
Micron shares surged nearly 62% in less than a month, a move many traders viewed as difficult to sustain without periodic pullbacks.
As valuations expanded rapidly, investors increasingly moved to secure profits after the stock’s sharp advance to record highs.
Additional market attention also emerged following reports involving share purchases linked to Senator John Fetterman before part of the rally acceleration, though no allegations of wrongdoing have been made.
Long-term AI demand remains intact
Despite the short-term volatility, some investors argued that the Nvidia-China developments may not materially alter the broader AI demand outlook for Micron.
Analysts noted that demand for AI infrastructure memory products remains extremely strong globally, allowing companies such as Micron to potentially offset weaker demand from one region with sales elsewhere.
Still, investors remain mindful that the memory semiconductor industry has historically been highly cyclical.
Periods of elevated pricing and tight supply have often eventually been followed by oversupply conditions and declining profitability once production capacity expands too aggressively.
Micron plans to invest approximately $25 billion during 2026 to expand manufacturing capacity.
Friday’s selloff reflected growing investor caution as semiconductor valuations remain elevated and geopolitical uncertainty surrounding the global AI supply chain continues to intensify.
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