Micron Lost 17% in a Day. Its $35 Billion Buyback Can Start December 9

Micron Technology (MU) shares fell 1.27% to $723.81 after October CPI data exceeded forecasts, increasing Fed rate hike expectations. The company invested $1 billion in AI startup Anthropic, buying 13.5 million shares at $74 each. Micron's market cap is $829.5 billion, with a P/E ratio of 9.88, according to GuruFocus.

Anthropic, an AI company, disclosed that Nvidia, Alphabet, AMD, Micron, Broadcom, Microsoft, and TSMC Partners will invest $26 billion in its IPO. Nvidia and Google each commit $10 billion, while others invest smaller amounts. The funds will support Anthropic's $900.9 billion infrastructure spending over 20 years, with $70.7 billion due by September 2027.

U.S. stocks fell Tuesday after an inflation report showed higher-than-expected price increases, raising expectations for further Federal Reserve interest rate hikes. The S&P 500 dropped 0.7%, the Dow Jones fell 0.6%, and the Nasdaq declined 0.8%. Higher yields on the 10-year Treasury negatively impacted stocks, particularly in the real-estate sector, with Lennar, D.R. Horton, and PulteGroup seeing significant declines. Nvidia also fell 5.3% amid ongoing scrutiny and AI industry concerns.

Seven tech companies, including Alphabet, Nvidia, and Microsoft, reportedly plan to invest $26 billion in Anthropic's IPO. The companies involved are Alphabet, Nvidia, Microsoft, AMD, Broadcom, Micron Technology, and Taiwan Semiconductor Manufacturing. Anthropic has not confirmed the figure, and the reported pricing was deemed inaccurate. The investment would be alongside the IPO offering, with Google having an option to buy up to $10 billion in Class N stock.

Bank of America removed Nvidia, Micron, and Lam Research from its US 1 List, though all retain Buy ratings. Nvidia's stock fell 4% amid CEO Jensen Huang's scandal, while the others rose. The bank did not explain the changes. Nvidia's stock is down 26% from its October high. Bank of America's chip analyst Vivek Arya attributes sector gains to AI spending.

Morgan Stanley recommends buying semiconductor stocks, citing attractive valuations and strong industry fundamentals. Nvidia (NVDA) and Broadcom (AVGO) are top picks, trading at 9x 2028 P/E. The report highlights GPU/XPU compute and memory as preferred sub-sectors, with SanDisk (SNDK) and Micron (MU) also mentioned as attractive.