Micron Technology (MU) stock fell more than 5% out of the gate Thursday as the memory chipmaker's disappointing fiscal fourth-quarter revenue outlook overshadows its fiscal third-quarter top- and bottom-line beats.
In the quarter ended May 30, Micron's revenue surged 81.5% year-over-year to $6.8 billion, driven by "robust AI-driven demand for data center products." Its earnings per share (EPS) came in at 62 cents compared with a loss of $1.43 in the year-ago period.
"We are gaining share in high-margin products like High Bandwidth Memory (HBM), and our data center solid-state-drives (SSD) revenue hit a record high, demonstrating the strength of our AI product portfolio across DRAM and NAND," Micron CEO Sanjay Mehrotra said in a statement.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The results handily beat analysts' expectations. According to CNBC, Wall Street was anticipating revenue of $6.7 billion and earnings of 51 cents per share.
However, sentiment turned negative toward Micron after the company provided the outlook for its fiscal fourth quarter, which didn't blow away analysts' expectations. MU anticipates revenue of approximately $7.6 billion, plus or minus $200 million, and EPS of roughly $1.08, give or take 8 cents per share. Analysts are expecting revenue of $7.6 billion and earnings of $1.05 per share.
Still, Mehrotra says the company is excited "about the expanding AI-driven opportunities ahead, and are well positioned to deliver a substantial revenue record in fiscal 2025."
Is Micron stock a buy, sell or hold?
Wall Street is very bullish on the tech stock and for good reason. Indeed, MU has been one of the best semiconductor stocks so far this year, up 58% even with today's decline. According to S&P Global Market Intelligence, the average analyst target price for MU stock is $157.23, representing implied upside of more than 16% to current levels. Additionally, the consensus recommendation is a Strong Buy.
Financial service firm Stifel is one of the more bullish outfits on Micron stock with a Buy rating and $165 price target.
"Though Micron's earnings and quarterly outlook exceeded consensus, expectations were clearly elevated ahead of Wednesday’s print, causing the stock to trade-off in the aftermarket," Stifel said in a note this morning. "Ultimately, we see the benefits to pricing and profitability in the interim outweighing other concerns and maintain our Buy rating."
Stifel's $165 price target represents implied upside of nearly 22% to current levels.
Related Content
-
How We Found This List of the Best REITs to Buy NowReal estate investment trusts, or REITs, are a special class of stocks that are known for their high dividend yields. Here's how to find the best ones to buy.
-
Stock Market Today: Stocks Enjoy a Fed Day Relief RallyThe question now is whether Jerome Powell and other policymakers can get the balance right given all the new noise.
-
The Best REITs to BuyReal estate investment trusts, or REITs, are a special class of stocks that are known for their high dividend yields. Here's how to find the best ones to buy.
-
Stock Market Today: Stocks Enjoy a Fed Day Relief RallyThe question now is whether Jerome Powell and other policymakers can get the balance right given all the new noise.
-
The Free-Lunch Strategy to Reduce Risk From Tech StocksA recent rout in tech stocks has some investors thinking more defensively. This "free-lunch portfolio" strategy can help.
-
Stock Market Today: Stocks Skid Into Another Risk-Off TurnThe promise of the AI revolution can't overcome flickering hopes for a "Fed put."
-
How to Survive Market Mayhem2025 is turning out to be a turbulent year for the market, but don't panic. Here are four ways investors can ride out the storm.
-
Alternative Investments Under Trump: What You Need to KnowAs access to alternative markets opens up, retail investors looking to enhance their long-term financial outcomes have more opportunities to carefully consider.
-
Beware of TV/Billboard Personal Injury Law Firms: Here's WhyIf you or someone you know is tempted to hire a so-called settlement mill to handle a personal injury case, here are some reasons to reconsider.
-
How Small Businesses Can Clear the Economic Hurdles AheadShifting rules on taxes, trade and regulation are creating uncertainty for SMBs. Owners can overcome that by focusing on efficiency, flexibility and investment.
