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Micron Technology Stock Skyrockets Amid Inventory Concerns

The Chipmaker's Bullish Run Faces Potential Hurdles

Stock Jumps 25%, But Analysts Raise Red Flags

Micron Technology's stock has experienced a remarkable rally, rising approximately 25% on Tuesday. However, a recent report from Citigroup casts a shadow over the company's future prospects. Analysts at the investment bank have identified inventory concerns that pose potential risks to Micron's growth.

Technical Resistance and Support Levels

After breaking a three-year resistance level at $1305, Micron's stock formed a second base of resistance at that level. While the stock has held above this support, traders were anticipating a potential breakout above $135 on June 26.

Market Outlook and Recent Performance

Micron's surge to a record high on March 21 was driven by the company's strong revenue forecast. However, the recent weakness in its guidance has raised concerns about the chipmaker's ability to maintain its growth trajectory. Nevertheless, the increasing demand for artificial intelligence (AI) has fueled a 50% sequential growth in Micron's data center revenue.

Analyst Commentary and Financial Results

Analysts at Citigroup have highlighted concerns over Micron's inventory levels, particularly in the personal computer and mobile device markets. These concerns stem from the company's weaker-than-expected guidance for the current quarter. Despite the strong financial results reported for fiscal Q3 2024, the inventory issue has overshadowed the positive news.