Micron Technology: AI Boom Drives Growth Amid Market Volatility

Down 44%, This AI Stock Is a Screaming Buy Right Now (Hint: It's Not Nvidia) | The Motley Fool

Nvidia has dominated the AI narrative in the stock market, captivating investors and the media after soaring 2,190% over the past five years and becoming the most valuable company in the world for a brief period (it's currently No. 2). However, Nvidia is far from the only opportunity in the AI or semiconductor space. In fact, one chipmaker just reported 400%-plus year-over-year data center revenue growth and overall revenue growth of 84% to $8.7 billion in its latest earnings report (for the quarter ending Nov. 28). I'm talking about Micron Technology (MU 3.48%), the memory-chip specialist that is surprisingly down 44% from its recent peak, despite that blowout growth. That discount and its potential in AI make the stock an appealing buy right now. Let's review the company's recent results first and then get into the buy case. Micron is a leader in memory chips, including DRAM, NAND, and high bandwidth memory (HBM). The company is also an integrated device manufacturer, meaning it both designs and manufactures its own chips like Intel and Samsung do. Memory chips are a highly cyclical business, prone to price fluctuations and industry gluts, and owning its own foundries makes Micron more exposed to the boom and bust cycle in semiconductors. Running foundries requires a high level of capital, but the integrated business model allows the company to better capture margins when the business is performing well. The chart below, which shows Micron's price compared to its previous high, gives a sense of how volatile the stock has been. As you can see, over the last decade, the stock has fallen by 40% or more on four occasions before hitting a new all-time high. Cyclicality and volatility are part of the risk in investing in Micron, but there's no question the semiconductor sector is in a boom right now, driven by the explosive growth of AI, though some subsectors like PCs and smartphones are weaker. In addition to Nvidia's blowout growth, industry bellwether Taiwan Semiconductor Manufacturing recently reported revenue growth of 36% in the third quarter to $23.5 billion, showing strong growth in the sector. Noting strong AI demand, management said that data center revenue topped 50% of total revenue for the first time in the quarter, following a trail first blazed by Nvidia in the chip sector. That now makes the vast majority of Micron's revenue from the data center, where AI computing is taking place. After reporting fiscal first-quarter earnings on Wednesday, Micron stock plunged as much as 19% on Thursday on its weak second-quarter guidance. However, the company has a history of being conservative with its guidance, and the weakness was due to consumer markets like smartphones, whereas the AI business remains strong. HBM, the part of the business closely tied to AI, is seeing impressive growth. The company said it's on track to achieve its HBM target for the fiscal year and reach a "substantial record" in HBM revenue, including "significantly improved profitability, and free cash flow" in the fiscal year. Micron expects a sequential decline in revenue and adjusted earnings per share (EPS) in the second quarter, falling from $8.7 billion to $7.9 billion and for adjusted EPS to slip from $1.79 to $1.43. However, management's explanation for the weak outlook should reassure investors. CEO Sanjay Mehrotra said the company had warned previously that seasonality and customer inventory reductions in consumer-facing segments like smartphones would affect Q2 results. He added, "We are now seeing a more pronounced impact of customer inventory reductions," and continued, "We expect this adjustment period to be relatively brief and anticipate customer inventories reaching healthier levels by spring, enabling stronger bit shipments in the second half of fiscal and calendar 2025." In other words, the issues causing the weak second-quarter guidance look like just a speed bump for the company rather than a sustained headwind, and management expects to return to sequential growth in the second half of the year. For a stock to fall 17% on a one-time guidance cut feels like a misread by the market and a buying opportunity for investors. A sell-off driven by short-term news often presents a good buying opportunity, but there's more to Micron's buy case than that. Micron is clearly capitalizing on the AI boom with the surge in data center revenue, and with its largest customer, which is believed to be Nvidia, now making up 13% of its revenue. A close relationship with Nvidia is clearly a tailwind at this stage of the AI boom as Nvidia just reported 94% growth in year-over-year revenue in its Q3 report. Micron's results are notoriously lumpy and cyclical, but it has the ability to generate huge profits under the right circumstances -- and those seem to be shaping up as the AI boom plays out. For example, Micron expects the addressable market for HBM to jump from $16 billion in 2024 to $64 billion in 2028 and to $100 billion in 2030. Even if it just maintains its market share in that segment, its HBM revenue will be up 4x in four years and 6x and six years. Finally, Micron stock is also much cheaper than its AI and chip stock peers, trading at a forward P/E of just 10 based on this year's estimates. While those estimates are likely to come down after its guidance, Micron still looks like a bargain at any price near that. Micron investors should monitor the chip and AI cycle closely, but there's a lot of upside potential in the stock. Getting back to its peak this summer would mean a 75% jump for the stock, and shares could continue to rally further over the next year or two, especially if it continues to see strong growth in the data center. Micron is the rare AI stock that offers rapid growth and a good value right now.

1 Super Semiconductor Stock to Buy Hand Over Fist in 2025, According to Wall Street | The Motley Fool

The semiconductor industry is the beating heart of the artificial intelligence (AI) revolution. Most investors are focused on Nvidia (NVDA 3.08%) -- and rightly so, because it makes the best data center chips for developing AI -- but it isn't the only semiconductor company cashing in on this technology boom. Micron Technology (MU 3.48%) is a leading supplier of memory and storage chips, which have become important components of the AI hardware story. As a result, the company's data center revenue is soaring at the moment, but it also faces significant AI opportunities in the smartphone and personal computing (PC) segments. Micron reported a strong set of financial results for its fiscal 2025 first quarter (ended Nov. 28) on Wednesday, Dec. 18, but its stock plunged 12% in after-hours trading. However, the Nasdaq-100 technology index sank 3.6% on the day, its second-worst drop in 2024 so far, so it was a bad day for the stock market overall. Therefore, this might be a golden opportunity for investors as we head into 2025. The Wall Street Journal tracks 43 analysts who cover Micron stock, and the overwhelming majority have assigned it the highest-possible buy rating. Here's why the Street is so bullish. Memory chips complement the graphics processors (GPUs) supplied by Nvidia. They store information in a ready state so it can be called upon instantly, which is essential in data-intensive AI workloads. Since many AI models now rely on trillions of data points, they require significant memory capacity. Micron's HBM3E (high-bandwidth memory) solutions are the best in the industry, providing 50% higher capacity than competing hardware while consuming 30% less energy. That's why Nvidia chose Micron's HBM3E to power its new Blackwell GB200 data center GPU, which is the company's most powerful AI chip to date. Micron is completely sold out of its data center memory chips until 2026, but it isn't resting on that success. It's already working on a new HBM4E solution, which will offer a 50% leap in performance compared to its HBM3E hardware. The market for data center HBM is worth around $16 billion annually right now, but Micron predicts that number will grow to $100 billion by 2030. Maintaining a technological edge will be key to capturing as much of that value as possible. But Micron's AI opportunity transcends the data center, because PCs and smartphones are capable of processing some AI workloads on-device without requiring external computing power. The company says PCs fitted with AI processors require DRAM memory capacity of between 16 and 24 gigabytes, compared to an average DRAM content of 12 gigabytes in non-AI PCs last year. Higher capacity translates into more expensive DRAM chips, which means more revenue for Micron. On the smartphone front, more than 60% of the new devices using Micron's hardware required at least 8 gigabytes of memory capacity during the recent quarter, which is significantly higher than last year. The company also recently told investors that a number of smartphone manufacturers using the Android mobile operating system have announced AI devices with 12 gigabytes and 16 gigabytes of memory, so capacity is climbing fast. Micron generated a record $8.7 billion in total revenue during its fiscal 2025 first quarter, which was a whopping 84% increase from the year-ago period. However, the real story is beneath the surface of the headline number. Micron said its data center revenue, specifically, soared by 400% year over year to $4.4 billion. It accounted for over 50% of the company's total revenue for the first time, and its momentum is likely to carry through into the next few quarters as HBM shipments are running ahead of schedule. Micron's mobile segment revenue came in at $1.5 billion, which was a modest increase of 15% compared to the year-ago period (although it was down sequentially compared to the quarter three months earlier). AI should continue driving demand for higher DRAM capacity, as I mentioned, so calendar 2025 is likely to be a strong year for the mobile segment. The company also experienced a surge in its profits thanks to its rapid revenue growth combined with careful expense management. Its non-GAAP (generally accepted accounting principles) earnings per share (EPS) came in at $1.79 during the quarter, which was a big positive swing from the $0.95 per-share loss it generated in the same quarter last year. Micron's profitability tends to be lumpy because of the cyclical nature of the semiconductor industry. For example, it only generated $1.30 in non-GAAP EPS during the whole of fiscal 2024, due to high inventory levels and soft prices during the first half of that year. Those issues were less prevalent during the first quarter of fiscal 2025, and the company also benefited from the incredible AI tailwind. Since AI products like HBM3E are already sold out next year, they add some predictability to Micron's financial results. Wall Street's consensus estimate (provided by Yahoo!) suggests the company will deliver $8.90 in EPS for the whole of fiscal 2025, which places its stock at a forward price-to-earnings (P/E) ratio of just 10.2. That's a 65% discount to Nvidia's forward P/E ratio of 29.6. Considering the incredible growth in Micron's data center segment right now, I would argue the current discount is far too steep. After all, Micron's HBM3E sales will be closely tied to Nvidia's GB200 sales going forward -- so if you think Nvidia will sell a truckload of AI chips, it's difficult to be bearish on Micron's prospects. That might be why Wall Street remains bullish on Micron stock. Of the 43 analysts tracked by The Wall Street Journal, 29 have assigned it the highest possible buy rating. A further 10 are in the overweight (bullish) camp, and three recommend holding. Just one analyst in the entire group recommends selling. The analysts have an average price target of $146.82 for Micron stock, implying a potential upside of 61% over the next 12 to 18 months from where it trades as of this writing. The Street-high target of $250 points to a potential upside of 174%. Therefore, investors seeking some value in the booming AI semiconductor space should consider adding Micron stock to their portfolio for the new year.

Prediction: This Artificial Intelligence (AI) Semiconductor Stock Is Set to Soar After Dec. 18 | The Motley Fool

Surprisingly, Micron Technology (MU 5.62%) stock turned in a disappointing performance on the stock market in 2024. It clocked gains of just 20%, despite delivering solid results in recent quarters that point toward outstanding growth in the company's revenue and earnings. Shares of the memory specialist are down 27% since hitting a 52-week high in mid-June. However, it won't be surprising to see the stock's fortunes changing after Micron releases its fiscal 2025 first-quarter results on Dec. 18. Let's see why that may be the case. Micron Technology is known for manufacturing memory chips for both computing and storage. This market is historically cyclical in nature, depending on the demand for personal computers (PCs) and smartphones. This explains why the global memory market plunged nearly 39% last year, as per Gartner's estimates, owing to a 4.4% drop in shipments of PCs, smartphones, and tablets. The drop in device shipments was more pronounced in 2022, with a decline of 11.9%. Not surprisingly, Micron's financial performance in 2022 and 2023 suffered. However, the memory industry has been in turnaround mode this year. It's driven by catalysts such as artificial intelligence (AI) that are driving a jump in memory consumption across multiple areas, such as data centers, smartphones, and PCs. For example, the usage of high-bandwidth memory (HBM) in AI chips has increased at an incredible pace, as the likes of Nvidia have been integrating this type of memory to make their AI accelerators more powerful. Nvidia's latest Blackwell B200 GPU is equipped with 192 gigabytes (GB) of HBM, which is a big improvement over the previous-generation H100's 96 GB and H200's 144 GB. This factor could help Micron deliver better-than-expected results. That's because when Nvidia released its latest quarterly results last month, management pointed out that its Blackwell production ramp-up is happening at a stronger-than-expected rate. Nvidia points out that it is on track to "exceed our previous Blackwell revenue estimate of several billion dollars as our visibility into supply continues to increase." This is good news for Micron, as the chipmaker has already been supplying its HBM chips to Nvidia. The stronger Blackwell demand could help it beat the market's expectations. Catalysts such as HBM also explain why the global memory market is expected to generate $163 billion in revenue this year, up significantly from $92 billion last year. Micron seems positioned to deliver impressive guidance as well. That's because the size of the memory market is expected to jump to $204 billion in 2025. HBM, of course, is set to play a central role in this market's growth. Micron anticipates this specific type of chip to generate $25 billion in revenue next year, up from $4 billion in 2023. At the same time, new catalysts such as the incoming PC refresh cycle and the growth in the smartphone market could give Micron an additional boost. IDC estimates that the global PC market could show 4.3% growth in 2025, following a flat performance this year. Meanwhile, global smartphone sales are expected to grow in the low single digits next year. The combination of these factors should ensure that the memory market continues to remain in good health in 2025. That should be enough to help Micron sustain the impressive growth momentum that it has gained in recent quarters. Analysts expect Micron's revenue to jump 84% year over year to $8.71 billion in the first quarter of fiscal 2025. It is expected to post a profit of $1.77 per share, compared to a loss of $0.95 per share in the same quarter last year. Those numbers are well within Micron's guidance range. We have already seen that stronger demand from the likes of Nvidia could help Micron beat consensus expectations, and that could send the stock soaring following its quarterly report. At the same time, Micron is expected to report outstanding top-line growth of 52% in fiscal 2025 to $38 billion, while earnings are estimated to shoot up to $8.78 per share from $1.30 per share in the previous fiscal year. Finally, Micron's incredibly cheap valuation means that investors are getting an incredible deal on the stock right now. The chipmaker is trading at just 12 times forward earnings, and Yahoo! Finance points out that its price/earnings-to-growth ratio (PEG ratio) based on its five-year estimated earnings growth rate is just 0.17. A PEG ratio of less than 1 means that a stock is undervalued with respect to the growth that it is expected to deliver. This makes Micron a top growth stock that investors can consider buying, as it seems set to soar higher this month, and next year as well.

Micron's AI Opportunity Isn't as Big as It Looks | The Motley Fool

Memory chip manufacturer Micron (MU 3.48%) threw investors for a loop on Thursday with a quarterly report that featured an outlook that wasn't even in the ballpark of Wall Street's expectations. In the first quarter of its fiscal 2025, Micron's performance was solid, buoyed by soaring demand for high-bandwidth memory (HBM), which is critical for AI accelerators. However, the companies that buy its PC and mobile memory chips now have too much inventory on hand and are pulling back. Micron's guidance for the fiscal second quarter calls for revenue of $7.9 billion, more than $1 billion below the consensus analyst estimate. Micron is pitching itself as an AI play. The company predicts that the market for HBM chips will soar from $16 billion this year to more than $100 billion in 2030. Investors, though, were more concerned about the company's weak near-term outlook than they were excited about the AI opportunity on Thursday, sending the stock down by a double-digit percentage in the session. While demand for high-bandwidth memory will almost certainly continue to rise, it's unlikely to escape the boom-and-bust nature of the memory chip market. A large proportion of the DRAM and NAND chips that Micron and its competitors sell are commodity products, and as such, their pricing is tied tightly to supply and demand. During times when demand outstrips supply, manufacturers can boost prices and profits can soar. Building out new chip manufacturing capacity is a capital-intensive process, and it takes time, so shortage situations can persist for a while. Inevitably, though, competing memory chip manufacturers build out too much total capacity in reaction to expected future demand. Once supply starts to outstrip demand, prices can tumble and profits can turn into steep losses. While chipmakers can respond to that situation by cutting production, all it takes to keep an oversupply situation dragging on is one player prioritizing market share. Often, those down cycles come to an end when the most aggressive manufacturer starts burning cash and is forced to slash production. The market's demand for high-bandwidth memory is insatiable at the moment, so pricing is strong. HBM sales are currently boosting Micron's profit margins, offsetting the impact of its lower-margin products. Predictions are in the stratosphere. Some estimates forecast the AI chip market will grow by a factor of 10 between 2023 and 2032, exceeding the current size of the entire semiconductor market. All that would have to happen for HBM chip pricing to collapse, taking profit margins with it, is for these forecasts to prove overly optimistic. Micron and its competitors are building out their HBM production capacity under the assumption that demand will grow at a certain rate. If the AI chip market hits a bump in the road for any reason, the HBM chip market will start to follow the same pattern that the broader memory chip market has been following for decades. For Micron's $100 billion estimate for the HBM market to prove accurate would likely require the dynamics of the memory chip market to fundamentally change. That seems unlikely to happen. Micron can survive and thrive in the long run regardless of what happens to the AI chip market, but its revenues and earnings are going to swing up and down just like they always have. Investors should avoid making the mistake of looking at Micron's results when everything is going great and extrapolating them into the future indefinitely. Micron is not the sort of company where the profit chart moves up and to the right each and every year. While Micron can be a great investment at the right price, investors would be wise to remember that downturns in the chip sector are inevitable, and that the AI trend isn't going to change that.

These Chip Stocks Could Rocket in 2025, According to Wall Street | The Motley Fool

Are analysts right about Advanced Micro Devices and Micron Technology? The semiconductor industry has delivered tremendous growth over the last several decades. Demand for chips can experience downturns, especially during economic recessions, but history shows that more advanced devices and technologies require more powerful processors, which creates an upward-sloping demand curve. In the near term, artificial intelligence (AI) continues to be a key sales catalyst for leading chip suppliers. IDC's latest report projects the semiconductor market will grow 15% in 2025, led by AI demand. This could spell a great buying opportunity for stocks that have recently fallen in value. Two stocks earning high praise on Wall Street are Advanced Micro Devices (AMD 0.28%) and Micron Technology (MU 3.48%). These stocks are trading well off their recent highs but have been reporting robust revenue growth from the data center market. The average Wall Street price target is 55% higher than AMD's share price of roughly $121 and 53% above Micron's share price hovering near $87. Let's take a deeper look at these companies to see if it's a smart move to bet your money on Wall Street's opinion. Shares of Advanced Micro Devices have delivered outstanding returns in recent years. AMD is making a lot of gains in the server market, which is coming at Intel's expense. Over the last few years, its market share of central processing units (CPUs) used in servers increased from the single digits to 34%. AMD also sees strong demand for its graphics processing units (GPUs) in the data center market, and this is the opportunity that could catapult the stock higher in 2025. Despite soft results in gaming and industrial markets, AMD's growth in data center helped drive double-digit revenue growth in Q3 over the year-ago quarter. Analysts expect AMD to report year-over-year revenue growth of 13% for 2024, according to Yahoo! Finance. Next year could see growth accelerate if demand in other segments picks up. For example, AMD's embedded chip revenue, including sales for industrial markets, was down 25% year over year in Q3, but the segment's revenue grew 8% over the previous quarter. With AMD stock selling 43% off its previous highs and trading at just 23 times next year's consensus earnings estimate, Wall Street's price target could be on the money. AMD expects the market for AI accelerators, or GPUs, to grow over 60% annually to reach $500 billion by 2028. It's got a potentially long runway of growth ahead, and these advanced processors generate above-average profit margins. This should allow earnings to grow faster than revenue. Analysts expect AMD to grow earnings at an annualized rate of 41%. For 2025, the Street is calling for earnings to reach $5.13. If the stock continues to trade at its current price-to-earnings multiple, the share price could climb along with earnings and reach Wall Street's price target of $184. Of course, a sudden downturn in the chip industry would stall AMD's momentum and limit the stock's gains. But with the share price already trading at a big discount to previous highs, there is a favorable risk-reward setup for AMD investors heading into 2025. Micron Technology is a leading supplier of memory and storage products for data centers, original equipment manufacturers, and consumer markets. The stock has had a good run since bottoming out in 2022, with the share price up 71%. But the shares are trading well off their highs as demand for dynamic random access memory (DRAM) weakened this year. The company just reported fiscal first-quarter results, where a soft outlook sent the stock down again. Sales to data centers grew 400% year over year and 40% over the previous quarter. Data center sales now make up over half of Micron's total revenue. Micron also said its high-bandwidth memory (HBM) shipments were ahead of expectations, with HBM revenue more than doubling over the previous quarter. Offsetting these positive demand trends was management's soft outlook for fiscal Q2. Revenue guidance was below the Street's estimates, but management said this is a temporary bump in the road stemming from an inventory adjustment by customers in consumer-related markets. The company expects this adjustment to be completed soon. Based on its updated outlook, Micron still expects to achieve record revenue and positive free cash flow in fiscal 2025 (which ends in August). The stock looks cheap at these lower share prices, but there is the risk that it could be a value trap. The problem is that Micron has an inconsistent operating history. While revenue has steadily grown over the last decade, the competitive nature of the memory market has caused major swings in Micron's earnings per share (EPS) and free cash flow. The stock is cheap enough that if the company delivers on management's outlook for the full year, the stock could return to its previous highs. At the current share price of $86, the stock is trading at 10 times this year's earnings estimate and 6.6 times fiscal 2026 estimates. Those low valuation multiples are tempting. Still, AMD offers the better risk-reward and is the safer bet to hit Wall Street's price target in 2025. Micron's latest quarter is a good reminder that there are a lot of variables impacting demand for its products that are difficult to predict, which makes valuing the company a challenge.

This once hot AI-derivative play is plunging. Here's what Wall Street says

A once trendy derivative play on the artificial intelligence boom has suddenly fallen on hard times after posting a rough earnings report. Shares of Micron Technology plummeted nearly 18% after the chipmaker issued weak fiscal second-quarter guidance . Boise, Idaho-based Micron topped estimates in its most recent quarter just ended, but its current-quarter forecast was far below the $1.91 earnings per share and $8.98 billion in revenue expected by analysts polled by LSEG. Shares are now up less than 3% on the year while the S & P 500 has ripped 24% higher. MU YTD mountain Micron shares this year Mi ron's update caused a stir on Wall Street, leading Bank of America analyst Vivek Arya to downgrade the stock to neutral, citing expectations for continued pressure on gross profit margins for the next two quarters resulting from struggling memory pricing caused by weak PC and phone markets. "Historically the stock has struggled to outperform when [gross margin] expansion has remained muted, leading to our stock downgrade to Neutral from Buy, even though we still feel positive about MU's position in the [high-bandwidth memory]/AI market where [total addressable market] was taken up +20% for CY25 to $30bn," Arya wrote. Morgan Stanley's Joseph Moore lowered his estimates on Micron, saying that commodity chip weakness should offset significant AI growth in the near term. He expects weakness in the NAND market to contribute to a potential 20% decline in revenue in February. Writing before the market opened Thursday, Moore said Micron looked expensive at then current prices, while also noting surprise at the magnitude of the post-earnings move late Wednesday. Moore cut his 12-month price target to $98 a share from $114, implying about 6% downside from Wednesday's close. Other Wall Street firms followed suit. Wells Fargo analyst Aaron Rakers moved to a $140 target from $175, saying consumer PC and smartphone weakness is overshadowing ongoing strength in demand. The lower target still implied roughly 35% upside from Wednesday's close. Goldman Sachs analyst Toshiya Hari adjusted his target to $128 from $145, while JPMorgan's Harlan Sur revised his to $145 from $180. Both firms kept their bullish recommendations on Micron. "Despite the near-term weakness, we continue to believe the down-cycle in memory will be short-lived and expect market conditions to improve in the latter part of 2025 as leading-edge DRAM supply remains tight and strong AI server demand continues to drive growth," in high-bandwidth memory (HBM), JPMorgan's Sur wrote. UBS analyst Timothy Arcuri retained his buy rating on Micron, calling the pullback a buying opportunity. "Quite simply, we continue to believe MU's leadership in HBM will be transformational for margins and its market position and what we heard on this [management conference] call only makes us more convinced in this view," Arcuri wrote.

Micron slumps as bleak quarterly forecast clouds AI-related boost

Dec 19 (Reuters) - Micron Technology (MU.O), opens new tab shares plummeted 15% in premarket trading on Thursday following a dismal forecast that signaled a squeeze from weak demand for personal computers and smartphones, overshadowing a solid lift from sales of AI-related chips. The market for dynamic random-access memory (DRAM) chips, the company's biggest revenue generator, has remained under pressure since the end of the pandemic amid a lingering supply glut. Morgan Stanley analysts said the DRAM market appeared unhealthy and is slowly deteriorating, with the biggest weakness in the older technologies, typically indicating oversupply. Micron anticipates low-single-digit percentage growth for smartphones in 2025. Global PC shipments slipped 1.3% in the third quarter to 62.9 million units, according to research firm Gartner. Meanwhile, revenue from the company's high-bandwidth memory (HBM) chips, a type of DRAM chip used to power advanced AI systems, more than doubled sequentially. "Micron's HBM story remains intact as the company has positioned itself to capitalize on market expansion opportunities from data center investments in 2025," Piper Sandler analysts said. The Boise, Idaho-based company is only one of the three HBM chip providers alongside South Korea's SK Hynix (000660.KS), opens new tab and Samsung (005930.KS), opens new tab. Demand for HBM chips has helped boost Micron's stock by about 22% so far this year and analysts expect it to remain a key driver. At least six brokerages cut their price targets on the stock following results, as per LSEG. Micron's 12-month forward price-to-earnings ratio is 10.67, lower than Qualcomm's (QCOM.O), opens new tab 13.4 and Advanced Micro Devices' (AMD.O), opens new tab 23.97. Reporting by Joel Jose in Bengaluru; Editing by Sriraj Kalluvila Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:U.S. Markets

Micron slumps as bleak quarterly forecast clouds AI-related boost

(Reuters) - Micron Technology shares plummeted 15% in premarket trading on Thursday following a dismal forecast that signaled a squeeze from weak demand for personal computers and smartphones, overshadowing a solid lift from sales of AI-related chips. The market for dynamic random-access memory (DRAM) chips, the company's biggest revenue generator, has remained under pressure since the end of the pandemic amid a lingering supply glut. Morgan Stanley analysts said the DRAM market appeared unhealthy and is slowly deteriorating, with the biggest weakness in the older technologies, typically indicating oversupply. Micron anticipates low-single-digit percentage growth for smartphones in 2025. Global PC shipments slipped 1.3% in the third quarter to 62.9 million units, according to research firm Gartner. Meanwhile, revenue from the company's high-bandwidth memory (HBM) chips, a type of DRAM chip used to power advanced AI systems, more than doubled sequentially. "Micron's HBM story remains intact as the company has positioned itself to capitalize on market expansion opportunities from data center investments in 2025," Piper Sandler analysts said. The Boise, Idaho-based company is only one of the three HBM chip providers alongside South Korea's SK Hynix and Samsung. Demand for HBM chips has helped boost Micron's stock by about 22% so far this year and analysts expect it to remain a key driver. At least six brokerages cut their price targets on the stock following results, as per LSEG. Micron's 12-month forward price-to-earnings ratio is 10.67, lower than Qualcomm's 13.4 and Advanced Micro Devices' 23.97. (Reporting by Joel Jose in Bengaluru; Editing by Sriraj Kalluvila)

Micron Earnings: Will AI Growth Outweigh 'Choppy' Memory Market? - Micron Technology (NASDAQ:MU)

Micron's bullish technicals flash optimism, but 200-day SMA resistance at $110.76 looms large. Micron Technology Inc MU heads into its first-quarter earnings announcement with a mix of optimism and caution. "Choppy Quarters Ahead"? As Jake Silverman, Bloomberg Intelligence Semiconductor Analyst, puts it, "choppy quarters ahead for NAND" could pose a challenge, with pricing and inventory pressures in the smartphone and PC markets. However, the analyst also highlights AI-related applications as a potential offset, giving Micron a chance to weather the storm. Read Also: How To Earn $500 A Month From Micron Stock Ahead Of Q1 Earnings Bullish Technical Signals Keep Optimists In The Game Micron's stock, currently trading at $110.93, flashes bullish signs across key technical indicators. Chart created using Benzinga Pro It sits well above short- and medium-term moving averages, with the eight-day simple moving average (SMA) at $103.94, the 20-day SMA at $102.07 and the 50-day SMA at $104.07. The Moving Average Convergence Divergence (MACD) at 1.15 also suggests momentum is on the bulls' side. However, the 200-day SMA of $110.93 coincides with the price, remaining a hurdle, signaling a potential resistance level. AI: A Light At The End Of The NAND Tunnel? The market will be laser-focused on how Micron balances the dynamics of two divergent forces: NAND Weakness: Elevated inventories and pricing pressure. AI Opportunities: As Silverman notes, secular growth in AI applications could provide a much-needed boost, potentially offsetting the broader NAND market challenges. What's Expected? Analysts estimate an EPS of $1.76 and revenue of $8.72 billion. But beyond these numbers, investors will be scrutinizing the company's guidance. Can Micron sustain its AI-driven growth momentum, or will "choppy quarters" in NAND drag it down? Read Next: US Stocks To Open Higher As Rate Cut Expectations Surge: All Eyes On Dow Jones To Break Its 9-Day Losing Streak Photo: NPS_87 on Shutterstock Market News and Data brought to you by Benzinga APIs

Why Micron Technology Rallied Today | The Motley Fool

The memory chip supplier will hold its earnings on Wednesday, as one of the last major companies to report before the year closes out. Ahead of Wednesday's news, one analyst reiterated his buy rating and bullish price target. Today, Citigroup sell-side analyst Christopher Danley published a bullish note ahead of earnings, maintaining a buy rating and a $150 price target. Though Micron's stock surged earlier this year, it has sold off since July, amid skepticism over the non-artificial intelligence (AI) portions of the semiconductor sector. In his note Monday, Danley admitted he expects Micron to guide below consensus for the current quarter, due to softness in the PC and smartphone markets. However, Danley wrote, "While there is excess DRAM inventory in the PC and handset end markets (combined 50% of [fiscal 2024] sales), this should go away this spring and is being offset by strength from the data center end market (35% of F24 sales)." Micron has seen crosscurrents, as its high-bandwidth DRAM memory products for artificial intelligence are seeing a surge in demand, even as other end markets languish in a downturn that started all the way back in 2022. However, it appears that Danley thinks the good outweighs the bad for the balance of 2025. Wall Street analysts expect Micron to deliver $8.71 billion in revenue and $1.77 in adjusted earnings per share (EPS) on Wednesday. However, as most are aware, commentary and forward guidance will also be as or more important than reported numbers. While Danley thinks the current quarter guide may be a tad below the $8.99 billion in revenue and $1.94 in EPS, any potential sell-off could be an opportunity to pounce. After all, the demand for DRAM memory should only continue to grow in the age of AI, and Micron has been executing well of late.