Micron Shares Poised for Continued Growth Amid AI Demand Boom
The chip sector is off to a strong start this week, led by Micron Technology’s impressive rally on Monday. The memory chip manufacturer’s shares surged 10.5% to close at $99.26, driven by optimism about robust artificial intelligence (AI) demand. This upward momentum is expected to continue, with Micron well-positioned to benefit from surging AI infrastructure demand.
AI Demand Fuels Chip Sector Growth
The catalyst for this rally was contract electronics manufacturer Foxconn’s record fourth-quarter revenue, driven by booming demand for AI servers. Additionally, Microsoft’s recent announcement to invest $80 billion in data centers in fiscal 2025 to power AI technology has further boosted sector growth prospects. Micron’s silicon is used in the latest AI processors from chipmaking giants such as Nvidia and Advanced Micro Devices, making it an attractive play in the AI space.
Technical Analysis: Key Price Levels to Watch
Micron’s chart reveals a rangebound pattern since early August, establishing clear support and resistance levels. The stock’s recent gap lower in mid-December was met with buying interest near the August and September swing lows. Monday’s rally from this key support area occurred on the highest trading volume since mid-December, indicating strong buying conviction.
Overhead Resistance and Support Levels
If Micron’s upward momentum continues, the shares may encounter overhead resistance near the $110 level, where they may meet the 200-day moving average and a trendline linking multiple peaks and troughs on the chart between March and December. A more bullish advance could fuel a rally to the $130 level, where investors may look for exit points near the April peak.
During retracements, investors should monitor if Micron bulls can defend the $97 level, which could encounter support near a horizontal line connecting a range of comparable price action on the chart dating back to early March. A breakdown below this level could see the shares revisit lower support around $85, where investors may look to accumulate stock near last month’s low.
Investor Takeaway
Micron’s strong rally on Monday, driven by AI demand optimism, has set the stage for continued growth. With key overhead resistance and support levels identified, investors can make informed decisions about their next moves. As the chip sector continues to benefit from AI infrastructure demand, Micron remains a compelling play in this space.
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