Micron Technology, Inc.

(NASDAQ Global Select)
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Slightly Bullish +25

Cramer Says Micron Stock Does Whatever SK Hynix Does in Korea, and He Dislikes It

Market commentary AI-generated analysis

πŸ“‰ Jim Cramer warns that Micron (MU) stock prices currently move in lockstep with SK Hynix, exposing US investors to Seoul market volatility.

πŸ‡°πŸ‡· The correlation was evident when SK Hynix shares fell nearly 8% prior to its record earnings beat, causing Micron to sink about 5% despite the positive news.

πŸ’» Both Micron and SK Hynix compete in high-bandwidth memory (HBM) and react to shared industry triggers like new designs from Chinese rival ChangXin Memory Technologies.

πŸ“ˆ SK Hynix reported record Q3 operating profit of 83.33 trillion won, a 632% year-over-year increase that topped analyst consensus estimates.

🏦 The listing of SK Hynix American Depositary Receipts on Nasdaq allows US investors to trade both memory leaders together, potentially deepening the unwanted correlation.

βš–οΈ Broker F&C Equities favors Micron specifically due to uncertainties surrounding Korean markets and potential tariff risks affecting the sector.

Bullish Signals
  • Analyst firm F&C Equities maintains a bullish stance on Micron, citing specific upside potential driven by uncertainties in the Korean market and tariff risks.
  • SK Hynix's recent record quarterly results with operating profit up 632% year-over-year validate the strong demand cycle for high-bandwidth memory (HBM) that benefits the sector.
Risk Factors
  • Jim Cramer highlights a significant risk where Micron stock prices are artificially correlated with SK Hynix, exposing US shareholders to Seoul trading volatility.
  • The recent listing of SK Hynix American Depositary Receipts on Nasdaq may deepen the unwanted overlap between the two competitors, complicating independent investment strategies.
Full Analysis
Jim Cramer of CNBC expressed concern that Micron Technology (MU) stock prices move in tandem with South Korean rival SK Hynix, a correlation he finds unfortunate for US investors. This linkage means Micron shareholders are exposed to volatility in the Seoul market, even though Micron is a US-based company headquartered in Boise, Idaho. The correlation was highlighted after SK Hynix posted record quarterly earnings on October 28, which saw its operating profit surge 632% year-overyear to 83.33 trillion won. Despite this positive fundamental news for the Korean competitor, Micron's shares reacted similarly to SK Hynix's previous price drops, demonstrating a strong cross-border trading link that Cramer hopes will eventually fade. Both companies compete in high-bandwidth memory (HBM) and face shared industry triggers, such as technological advances by Chinese rival ChangXin Memory Technologies. The overlap is further reinforced by the recent listing of SK Hynix American Depositary Receipts on Nasdaq, which allows US investors to trade both memory leaders together, potentially deepening the correlation Cramer dislikes. Analysts note that while Micron faces tariff risks and uncertainty regarding Korean market dynamics, some brokers like F&C Equities have maintained a bullish stance on Micron due to these specific geopolitical factors. The article underscores the unique risk profile of holding US memory stocks that are heavily influenced by international trading patterns in South Korea.