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One of TradeStation’s most actively traded stocks is finding itself at the middle of a trade war.
Micron Technology (MU) was the second-busiest symbol among our clients in May and June as management raised guidance. This month, President’s Trump’s trade war with China is keeping it near the top of the rankings.
In case you missed it, the memory-chip giant got hammered on Tuesday by news that a Fujian court would temporarily block some of its products. That sounded bearish for a company that’s estimated to get half its business from China.
But the bulls quickly shot back, with at least two analysts issuing positive notes so far. Bank of America Merrill Lynch said Chinese companies like Alibaba (BABA) and Huawei need MU’s chips for their hand sets and data centers that Mainland foundries cannot provide. Stifel Nicholas doubted the seriousness of the court case, viewing it instead as a pressuring tactic.
The company also looked to sooth nerves by saying the products covered by the Fujian ruling accounted for “slightly more than 1%” of annual sales. Management also maintained its guidance, just two weeks after raising it on strong pricing.
Bottom line: One of the most active stocks among TradeStation clients has found itself the middle of a tariff dispute between the world’s two largest economies.
Micron Technology (MU) chart, with 100-day moving average.
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