NVIDIA shareholders meeting and Micron financial report! Tonight will be an important day for chip stocks

As the momentum of AI chip stocks slows down, today will see two key events that could provide much-needed catalysts for the chip industry.

On Wednesday local time, NVIDIA will hold its annual shareholders meeting, while Micron Technology will announce its third-quarter earnings after the market closes. These two heavyweight events could be crucial for AI chip stocks to regain their upward momentum.

Recently, NVIDIA's stock has been hit, with investor enthusiasm for chip stocks waning. Despite a significant 6% rebound on Tuesday, NVIDIA had fallen over 7% in the past week after three consecutive days of decline, dropping nearly 10% from its historical high. Broadcom and AMD also fell by around 12% and 11% respectively over the past week.

Paul Meeks, Portfolio Manager and Co-CIO of Harvest Portfolio Management, stated that these two positive factors on Wednesday could drive a rebound in chip stocks. According to Meeks:

Chip stocks have been oversold, and in the long run, AI stocks still have room to rise with reasonable valuations. The pullback presents an investment opportunity, but it is advisable to wait until after the events before buying. I have a lot of cash on hand but won't bottom fish. I may increase my holdings in NVIDIA and Micron on Thursday morning after the news is released.

Pay Attention to Huang Renxun's Comments on AI Chips

Investors are closely watching for any relevant comments at NVIDIA's shareholders meeting. Although it is not yet confirmed whether NVIDIA CEO Huang Renxun will attend the meeting, any related comments could serve as a price driver.

Meeks pointed out that Huang Renxun's recent comments on AI chips during his trip to Asia have triggered a stock price rebound. His related comments could boost market sentiment, making investors feel that NVIDIA has not yet reached its revenue peak.

Micron's Earnings Guidance Could Drive Upside

Micron's financial report could also drive an industry-wide uptrend. The market generally expects that the growth brought by AI will be reflected in the performance, and this memory chip manufacturer will raise its earnings guidance.

For the fiscal year 2024 ending in August, the market widely expects Micron's revenue to be $37.3 billion, a 50% year-on-year increase, with earnings per share of $9.01. It is projected that the company's revenue for the fiscal year 2025 will be $43.1 billion, a 16% increase, with earnings per share of $12.04.

J.P. Morgan analyst Harlan Sur stated that AI-driven demand growth is the "fastest growth driver in memory chip history," and earnings expectations are expected to be revised upward as the industry continues to recover.

Citi analyst Christopher Danely raised the target price from $150 to $175 ahead of the earnings release, implying about 25% upside potential. Citi also expects the earnings guidance to exceed expectations, along with an anticipated increase in Micron's market share in the AI storage sector.

Rosenblatt Securities, on the other hand, has set a target price of $225, more than 60% above Tuesday's closing price, making it the most optimistic prediction on Wall Street.