Micron Falls as AI Revenue Misses Expectations

Micron shares fell 6% in premarket trading on Thursday after its current-quarter revenue forecast disappointed investors expecting AI demand-driven growth

Even though the company had “sold out” its high-bandwidth memory (HBM) processors for this year and the next, the chipmaker predicted fourth-quarter revenue of $7.6 billion, plus or minus $200 million, by the average estimate of analysts.

Micron is one of the few providers of HBM chips that fuel the world’s most advanced AI systems, which has enabled the company to capitalize on the increasing demand for semiconductors and drive its stock up 67% so far this year.

According to Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, “Anything less than fantastic is not good enough when your share price has been multiplied by three in just about 18 months.”

With the current share price of $133.25, the chipmaker is expected to incur a $10 billion loss. Intel, Qualcomm, and Broadcom (AVGO.O) were also down 0.2-2% in premarket trading, as were their peers.

“The high expectations for every company that is a part of the AI ecosystem are underscored by the market reaction,” stated analysts at Saxo Bank.

Nevertheless, confident analysts expressed optimism regarding the organization’s end markets following its surpassing revenue projections for the third quarter.

As the brokerage continues to observe market share gains for the company in the lucrative HBM semiconductor market, Goldman Sachs’s analysts regard the stock’s pullback as an opportunity to add to positions.

Harsh Kumar of Piper Sandler held a comparable perspective. “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 through the vast majority of 2025 as well,” Kumar asserted.
The results prompted at least two brokerages to increase their price targets.

According to LSEG data, Micron’s 12-month forward price-to-earnings ratio is 17.07, lower than the industry median of 23.46 and the 40.22 ratio of AI darling Nvidia.