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
-
Setting Objective Criteria for Employee Bonuses Aligned With Company GoalsWhen employees win, the company wins.
-
A Modern Guide to Money Etiquette: Gifts, Tips, Splitting Bills and MoreWhat is modern money etiquette? The customs for splitting a restaurant check, purchasing a wedding gift, tipping and more have evolved. These guidelines can help.
-
Potential Ripple Effects of Taxing Unrealized Capital GainsThe proposed tax on unrealized gains would be limited to those with a net worth above $100 million, but some see a broad impact on markets and businesses.
-
Succession Musts: Thoughtful Planning and Frank DiscussionsWhen it comes to passing on the family business, you don't want anyone to be surprised about who will control or inherit the business after the owner's death.
-
How to Navigate Finances as a Blended FamilyIf you’re planning to become part of a blended family, consider these financial issues as you and your spouse start a new life.
-
Here's How to Find Your Way Out of the Inherited IRA MazeTo navigate complex rules on inherited IRAs and RMDs, start by breaking down key terms and common scenarios. A clearer picture of your next steps will emerge.
-
Stock Market Today: Stocks Rally on Strong Netflix EarningsMega-cap tech leads the charge as markets rise for a sixth straight week.
-
Why American Express Earnings Have the Dow Stock LowerAmerican Express is the worst Dow Jones stock Friday after the payments giant reported a top-line miss in its third quarter. Here's what you need to know.
-
CVS Stock Falls After Karen Lynch Ouster: What to KnowCVS stock is lower Friday after the embattled healthcare company said Karen Lynch is out as CEO, effective immediately
-
Netflix Stock Jumps to the Top of the S&P 500 After Earnings. Here's WhyNetflix stock is spiking Friday after the streaming giant beat third-quarter expectations and gave an upbeat fourth-quarter outlook.
