Chip stocks fell on Friday. Micron down 7%; SOXL down 6%; Nvidia, ARM Holdings, ASML, Applied Materials down over 2%.

Micron Technology is facing margin pressures as it transitions from the NAND business to the high-bandwidth memory, or HBM, segment to serve the growing AI industry, UBS analysts said in a Friday note.

The analysts said that Micron Technology is working on a structural overhaul to reduce almost 10% of its NAND capacity as it prioritizes the DRAM segment for better margins on sustained demand for AI workloads. The brokerage expects margins to stabilize in fiscal year 2026 as revenue from the HBM segment picks up.

UBS modeled 12% quarter-on-quarter growth in the DRAM segment for Q3 and 5% for the NAND business.

The analysts said, "We expect DRAM to make up for the entirety of the overall Q/Q revenue increase due to higher HBM shipments - as MU raised

Nvidia stock was falling 2% on Friday. A downbeat market mood looked to be outweighing the confidence instilled in its technology by the chip maker’s GTC developers’ conference.

“The GTC conference did not provide many meaningful catalysts for the stock. Many of the announcements had been largely expected or were reiterations of prior commentary,” Raymond James analyst Sebastien Naji wrote in a research note.