Micron Technology Stock Plunges Pre-Market On Weak Q2 Guidance, But Retail Sentiment Stays Strong
By Stocktwits Inc | First Published Dec 19, 2024, 7:51 PM ISTFor the first time, data center revenue accounted for over half of the company's total sales.
Micron Technology (MU) shares tumbled nearly 13% in premarket trade on Thursday, after the company delivered mixed fiscal first-quarter results and guidance that failed to meet Wall Street expectations.
This is after the stock already took a beating of over 4% on Wednesday as tech stocks plummeted after the U.S. Federal Reserve signaled fewer rate cuts for 2025.
Latest Videos
The semiconductor company reported fiscal first-quarter earnings per share of $1.79, exceeding Wall Street’s consensus estimate of $1.77, according to Koyfin data.
Revenue came in at $8.7 billion, which was in line with analysts’ expectations. This was driven by record revenues in data center SSDs and strong contributions from High Bandwidth Memory (HBM), which more than doubled sequentially.
For the first time, data center revenue accounted for over half of the company's total sales.
However, the outlook for the second quarter dampened market enthusiasm, sending shares lower as weak demand for consumer-centric products such as personal computers and smartphones continues to impact business.
The company forecast revenue of $7.9 billion, plus or minus $200 million, significantly below analysts’ projections of $8.9 billion.
According to Micron's CFO Mark Murphy, the market for dynamic random-access memory (DRAM) chips, which account for most of the Company's revenue, remains sluggish because of weak consumer demand and an ongoing supply glut.
The company also highlighted cost-cutting efforts, reducing its NAND capital expenditures and moderating the pace of its technology upgrades to better manage supply amid challenging market dynamics.
Operating expenses in fiscal Q1 were $1.05 billion, down $34 million sequentially and benefiting from lower labor-related costs and ongoing tight expense control.
Gross margins improved to 39.5%, up 300 basis points sequentially, supported by higher DRAM pricing and a favorable shift in product mix. Still, lower NAND pricing offset some of these gains.
Operating expenses decreased to $1.05 billion, benefiting from stringent expense controls and reduced labor costs.
Despite the bearish market reaction, retail sentiment around Micron improved to ‘extremely bullish’ from ‘bullish’ as chatter remained at ‘extremely high’ levels.
Some users criticized the company’s decision to put out earnings on the same day as the Federal Reserve rate cut, while others stated that they were using the opportunity to ‘buy the dip.’
Despite recent volatility, Micron's stock has gained 22% year-to-date, outperforming the broader semiconductor sector.
For updates and corrections, email newsroom[at]stocktwits[dot]com.<
Read also: Sam Altman-Backed Oklo Stock Swings Wildly After Announcing Biggest Nuclear Deal So Far: Retail Flags ‘Rug Pull’
subscribe to Asianet Newsable WhatsApp channel by clicking here. For more reliable and latest news
subscribe to Asianet Newsable Telegram channel by clicking here.