By Adam Clark and Mackenzie Tatananni

Shares of Micron Technology slumped even after the company was selected to supply high-bandwidth memory to Nvidia. Broader fears about memory-chip demand overshadowed the good news.

Nvidia has certified Micron alongside South Korea's SK Hynix and Samsung Electronics as providers of the latest design of high-bandwidth memory, known as HBM4, Nvidia CEO Jensen Huang said on Friday.

Wall Street analysts had predicted Nvidia would use all three suppliers, although KeyBanc analyst John Vinh previously suggested SK Hynix and Micron were having some issues in meeting Nvidia's standards. Still, it's a welcome confirmation of business with the biggest chip maker in the world.

However, Micron shares were down 9.1% at $905.68 on Friday, heading for the worst single-day percent decrease since a nearly 10% drop in March, according to Dow Jones Market Data. All three major stock indexes were in the red, with the tech-heavy Nasdaq Composite falling 2.8%.

Micron looked set to add to a 7.7% loss from Thursday's session. Semiconductor stocks have dropped across the board following Broadcom's poorly-received earnings report. Having risen more than 735% in the past 12 months, Micron is vulnerable to sharp moves on any profit-taking in stocks.

Part of the move might be due to a report that Nvidia has reduced the proposed modular memory capacity for its next-generation Vera Rubin server racks, according to semiconductor research firm SemiAnalysis. Dylan Patel, head of SemiAnalysis, subsequently said "there's nothing bearish" about the firm's analysis in a post on X.

Modular memory is separate from the high-bandwidth memory which has been driving demand for memory-chips in AI servers. Because HBM is resource-intensive -- each unit needs roughly three times the semiconductor wafer capacity of standard memory -- expanding supply reduces production of other memory types and drives prices higher across the sector. Nvidia lowering modular memory capacity could be a sign of that dynamic in action.

"Overall, as HBM generations continue evolving in 2027, with larger die sizes and simultaneously rising demand, the crowding-out effect on conventional DRAM capacity is expected to intensify further," wrote analysts at research firm Trendforce. "This will provide suppliers with strong justification for raising HBM prices and strengthen their pricing power in HBM negotiations next year."

Write to Adam Clark at adam.clark@barrons.com and Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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June 05, 2026 13:57 ET (17:57 GMT)

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