Micron falls as AI rush provides less-than-enthusiastic revenue surge

Micron Technologies Inc’s shares fell about 6% during premarket trading on Thursday after the chipmaker’s current-quarter revenue forecast failed to impress investors looking for outsized results powered by the AI demand surge.
It forecast fourth-quarter revenue of $7.6 billion, plus or minus $200 million, a result that was in line with analysts’ average estimate despite a statement by the company that it had “sold out” its high-bandwidth memory chips for this year and the next.

Micron is one of the few providers of a variant of chips called HBM, which brings to life some of the world’s most advanced AI systems, giving this company the ability to cash in on surging demand for semiconductors and drive up its stock 67% so far this year.
“Anything less than fantastic is not good enough when your share price got multiplied by three in just about 18 months,” Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said in a note.

At current levels of $133.25 per share, the chipmaker is set to lose $10 billion. On premarket trading, Nvidia dropped 0.2 percent, while Broadcom Inc. sank 1 percent, Intel Corp. shed 0.6 percent, and Qualcomm Incorporated dropped 1.9 percent.
“The early market reaction reflects the fact that expectations are sky-high regarding every company remotely related to the AI ecosystem,” said analysts at Saxo Bank in a note.
Some analysts, however, turned positive on the firm’s end markets, after the company beat estimates for third-quarter revenue. Analysts at Goldman Sachs view the stock’s pullback “as an opportunity to add to positions” as the brokerage continues to see market share gains for the company in the lucrative HBM chip market.
Piper Sandler’s Harsh Kumar held a similar view. “At a high level, end markets for MU continue to improve with demand increasing and supply still relatively tight.”
“We envision that these conditions will continue to persist at least through the vast majority of 2025 as well,” Kumar added.

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