Key points
- Micron (MU) slid as much as 5.8% into Friday's open, then flipped positive, up roughly 2.8% by 10:30am ET.
- AMD and Nvidia (NVDA) clawed back most of their losses over the same stretch.
- The swing follows Thursday's Kimi K3-driven selloff, the same chip demand fear we pushed back on a day earlier.
Chip stocks had a wild morning on Friday. Micron (MU) had already drifted lower through the overnight and premarket session, then took a sharp final leg down right at the opening bell, bottoming out around 9:40am ET. From there it reversed hard, and within about an hour it had erased the entire move and was trading positive on the day. AMD and Nvidia (NVDA) followed the same shape, just without fully recovering.
The selling started well before the opening bell. Nasdaq 100 futures were down more than 2 percent premarket, extending Thursday's session, when the PHLX Semiconductor Index fell more than 3 percent and slipped into a bear market. The trigger was the one we wrote about Thursday: Moonshot AI released Kimi K3, its newest open model, and traders ran with the idea that cheaper AI means less demand for chips. We laid out then why that fear has a bad track record. DeepSeek did the same thing to Nvidia in January 2025, and hyperscaler spending went up afterward, not down.
By the time the opening bell rang, the damage was already partly done. Micron had drifted from Thursday's $853.20 close down to around $822 in premarket trading, a decline that built gradually over several hours with plenty of back and forth, at one point even touching $862 overnight. Then, in the first ten minutes of regular trading, it fell hard again, bottoming near $804, down close to 6 percent from Thursday's close. AMD and Nvidia followed a similar pattern: already down several percent by the open, then a sharper final drop right at 9:30am ET that pushed AMD's loss past 8 percent and Nvidia's past 4 percent.
The reversal from there was fast. By 10:30am ET, Micron had erased the entire move and traded above Thursday's close, up about 2.8 percent on the day. AMD had cut its loss to under 2 percent and Nvidia to under 1.5 percent. The Nasdaq-tracking QQQ was back to down about 1 percent, versus a low near 2.7 percent earlier in the session. There was no headline or press release behind the turn. It looked like dip buyers deciding the selloff had gone too far, too fast, on a story that hadn't actually changed.
The fundamentals underneath this didn't move overnight. TSMC beat earnings for a seventh straight quarter on Thursday. SK Hynix's blockbuster Nasdaq debut earlier this month raised $26.5 billion, mostly to fund more capacity, not less. Hyperscalers are still projected to spend around $650 billion on AI infrastructure this year. Cheaper models tend to mean more usage, not less compute, and Friday's reversal looks like the market remembering that on its own.
None of this means the selloff is over. Chip stocks have been the most volatile corner of the market for two straight weeks, and a violent bounce off a morning low is not the same thing as a trend change. As of 10:50am ET, some of that bounce had already faded: Micron's gain had narrowed to about 1 percent, and AMD and Nvidia had both slipped back to roughly down 2 percent. Whether the rest of the session holds these gains or gives more of them back is the next thing to watch.
