Micron Technology Stock Tumbles Amid Analyst Downgrades and Market Concerns

Analysts overhaul Micron stock price targets amid post-earnings slump

Micron Technology shares moved lower in early Thursday trading following a rare double downgrade for the AI-memory-chip maker as it continues to suffer its long summer slump. Micron (MU) , which has underperformed its chipmaking rivals as well as the broader tech sector this year, is looking to capitalize on the artificial-intelligence-investment surge through its high-bandwidth-memory chips. The group posted solid third-fiscal-quarter earnings in June and said current-quarter sales would rise 90% from the year-earlier period to around $7.6 billion, The figures reflected in part demand for its new HBM3E chips, which are now being built into Nvidia's (NVDA) H200 processors and its newly developed Blackwell systems. Micron also told investors that it expects to generate "multiple billions of dollars in revenue from HBM in fiscal 2025," which ends in August of next year. The company added that its share of the newly emerging market would be "commensurate with our overall DRAM market share" sometime next year. The stock, however, has fallen more than 40% since that late-June update, thanks in part to concern about the high valuations for AI-related chip stocks and the huge amounts of capital spending required to meet production and demand forecasts. Micron sees sharp rise in capital spending Capital spending will need to increase significantly, however, to enable that kind of production ramp. And Micron, which forecasts around $8 billion in capital expenditure for the current fiscal year, sees that figure rising to around the "mid-30%s range of revenue for fiscal 2025." At current forecasts, that would translate to capex of $13.5 billion, a near 70% increase from fiscal 2024 levels. Related: Analyst updates Micron stock price target after conference Exane BNP Paribas analyst Karl Ackerman, who issued a rare double downgrade for Micron stock, taking his rating to underperform' expects the group's lackluster performance to continue. "While some investors are aware of the downside risk to near-term results, we believe Micron will underperform its artificial intelligence peers through 2025 due to an oversupply of high bandwidth memory, leading to a faster-than-expected correction in conventional DRAM selling prices," Ackerman said. "Our earnings estimates for 2025 and 2026 are 34% and 45% below consensus, respectively," he added. Ackerman also slashed his Micron stock price target by $73, taking it to $67 a share. Raymond James: Micron DRAM cycle 'has legs' Raymond James analyst Srini Pajjuri, meanwhile, also lowered his Micron price target in a note published Thursday, cutting it to $125 from $160 while keeping his outperform rating in place. The analyst was more optimistic about the group's near-term performance, arguing that weakness has been priced in to the stock and the new DRAM cycle "has legs." Other analysts have argued that Micron will be able to generate better pricing power for its legacy DRAM memory chips, thanks to its HBM developments and market-share gains. Related: Nvidia CEO Jensen Huang's unconventional management style Micron's DDR5 random access memory, released in 2020, also provides more performance with less power than its predecessors, while solid-state drives are used in flash-memory storage on laptops and desktop computers. "We are in the early innings of a multi-ear race to enable artificial general intelligence, or AGI, which will revolutionize all aspects of life," Chief Executive Sanjay Mehrotra told investors in June. More AI Stocks: "AI will also permeate to the edge via AI PCs and AI smartphones, as well as smart automobiles and intelligent industrial systems," he added. "These trends will drive significant growth in the demand for DRAM and NAND, and we believe that Micron will be one of the biggest beneficiaries in the semiconductor industry of the multi-year growth opportunity driven by AI." Micron shares were marked 3.4% lower in premarket trading to indicate an opening bell price of $87.60 each. Related: Veteran fund manager sees world of pain coming for stocks

Micron dips following downgrade, price target cuts

Micron Technology (NASDAQ:MU) slipped 3% during pre-market trading on Thursday after it received a downgrade and price target cuts from analysts due to a temporary slowdown in non-high-bandwidth memory markets. This followed Wednesday's gain of 4.4%. Raymond James lowered its price target on Micron to $125 from $160, but reiterated its Outperform rating on the stock. Micron's price target was lowered to reflect slower near-term volume growth in non-high-bandwidth memory DRAM and NAND markets. However, Raymond James considers it a temporary slowdown and expects the DRAM upcycle to continue well into the second half of 2025. "Data Center demand remains strong driven by HBM while on-device AI is driving strong content growth in smartphones," said Raymond James analyst Srini Pajjuri, in an investor note. "PC/Smartphone customers appear to have pre-built inventory in anticipation of price increases, causing 2H24 seasonality to be more muted." Micron still appears on track to achieve its HBM targets, and Raymond James expects "ongoing yield improvement to remain a tailwind to margins." In a more extreme move, Micron was downgraded to Underperform from Outperform by BNP Paribas Exane, and the price target was slashed to $67 from $140. BNP Paribas analyst, Karl Ackerman, said he expects Micron's lackluster performance to continue. Micron hit a year-to-date high of $153 in mid-June, but has mostly slid since. However, many analysts remain bullish on the stock. Citi Research considers Micron a 'top pick,' as the firm continues to benefit from strong pricing for DRAM, which is expected to rise 66% year-over-year in 2024 and 14% in 2025. It has a Buy rating from Seeking Alpha analysts and a Strong Buy rating from Wall Street analysts. Seeking Alpha's Quant system, which routinely beats the market, rates it a Buy.

Why Micron Stock Is Sinking Today | The Motley Fool

Micron Technology (MU -3.98%) stock is falling in Thursday's trading. The memory-chip company's share price was down 3.9% as of 3:15 p.m. ET, according to data from S&P Global Market Intelligence. Shares had been down as much as 7.2% earlier in the daily session. Micron stock is falling in conjunction with the release of two price-target cuts from analysts. The company's share price is now down roughly 43% from the high that it reached earlier this year. Raymond James published a mixed note on Micron before the market opened this morning. While the firm maintained an outperform rating on the stock, it lowered its one-year price target from $160 per share to $125 per share. The lead analyst on the stock cited recent comments from company management pointing to lower sales volume growth in its non-high-bandwidth-memory (HBM) DRAM (dynamic random access memory) and NAND markets as a reason for the target cut. Exane BNP Paribas also published new coverage on Micron stock today, downgrading its rating on the stock from outperform to underperform and slashing its price target from $140 per share to $67 per share. While the firm thinks near-term headwinds for the business are well understood by investors, it also anticipates that the business will underperform its peers in the artificial intelligence space because HBM supply will cause DRAM memory solutions to lose pricing power faster than expected. Micron stock rocketed higher throughout the first half of 2024 thanks to expectations that the business would see sustained tailwinds from artificial intelligence trends. But some investors have started to question whether these tailwinds will be as strong as anticipated. In its recent coverage on Micron, Raymond James' analysts stated that the long-term growth outlook for HBM solutions suggests that the stock deserves higher valuation multiples than it currently commands. On the other hand, the coverage from BNP Paribas raises concerns that high-bandwidth-memory technologies will actually diminish pricing power for the company's other offerings. As a result, its earnings target for Micron in 2025 is 34% below the average analyst estimate, and its target for 2026 is 45% below the average Wall Street target. The widely differing takes from Rayond James and BNP Paribas highlight the difficulties in predicting what comes next for the memory chip market. Bullish investors have been hoping that the rise of AI technologies would power strong growth for new-generation HDM solutions while also keeping demand and prices for DRAM high. BNP Paribas' outlook for the company stands out for being significantly more negative than most other analysts on Wall Street, but the possibility that product cannibalization will cause Micron to miss performance expectations is one that investors should consider.

What's Going On With Micron Stock? - Micron Technology (NASDAQ:MU)

Micron is set to report its fourth-quarter and fiscal-year financial results after the market close on Sept. 25. Micron Technology, Inc. MU shares are trading lower Thursday after Raymond James lowered its price target on the stock from $160 to $125. What To Know: Micron's stock has shed more than $70 billion in market value since June as stocks in the semiconductor sector struggled amid Nvidia's second-quarter results, a short report on SMCI, speculation surrounding a possible AI "bubble" and other factors. Read Next: Nvidia CEO Jensen Huang Admits 'It's Tense' As Surging Demand For Blackwell Chips Sparks Customer Frustration However, some investors remain optimistic on Micron, including CNBC host Jim Cramer, who recommended buying the stock at the $98 or $99 per share mark. Also, B of A Securities analyst Vivek Arya named Micron an attractive tech stock at its current price point. The analyst argued recent declines in the semiconductor sector are temporarily driven by external factors rather than any weakness in Micron's core business. Micron is set to report its fourth-quarter and fiscal-year financial results after the market close on Sept. 25. According to estimates from Benzinga Pro, analysts expect the company to report earnings of $1.15 per share and revenue of $7.667 billion for the quarter. Will MU Stock Go Up? When trying to assess whether or not Micron Technology will trade higher from current levels, it's a good idea to take a look at analyst forecasts. Wall Street analysts have an average 12-month price target of $169.12 on Micron Technology. The Street high target is currently at $225 and the Street low target is $125. Of all the analysts covering Micron Technology, 24 have positive ratings, one has neutral ratings and no one has negative ratings. In the last month, 3 analysts have adjusted price targets. Here's a look at recent price target changes [Analyst Ratings]. Benzinga also tracks Wall Street's most accurate analysts. Check out how analysts covering Micron Technology have performed in recent history. Stocks don't move in a straight line. The average stock market return is approximately 10% per year. Micron Technology is 4.81% up year-to-date. The average analyst price target suggests the stock could have further upside ahead. For a broad overview of everything you need to know about Micron Technology, visit here. If you want to go above and beyond, there's no better tool to help you do just that than Benzinga Pro. Start your free trial today. MU Price Action: According to Benzinga Pro, Micron Technology shares are down 4.61% at $86.49 at the time of publication Thursday. Read Also: What's Going On With First Solar Stock? Image: Unsplash Market News and Data brought to you by Benzinga APIs