Despite beating analyst estimates on earnings and revenue, shares of memory chip maker Micron Technology (NASDAQ:MU) stock fell about 5% overnight. Analysts blamed the company’s revenue forecast.
Micron was due to open this morning at $134.40 per share, a market capitalization of about $149 billion. Shares are still up over 50% in 2024.
AI Over Its Skis?
The company guidance was in line with estimates. But bulls who have doubled the stock price in the last year wanted more.
Net income for the quarter ending in May, the third of Micron’s fiscal year, came to $332 million, 30 cents per share fully diluted. Revenue was . The company reported capital spending of $2.06 billion, which cut its adjusted free cash flow to $425 million.
The fourth quarter estimate for revenue was $7.6 billion, give or take $200 million. Earnings are estimated at 61 cents per share.
In his earnings presentation, CEO Sanjay Mehrotra said data center revenue was in the third quarter compared with the second. Demand from PCs and smartphones was “only steady,” he wrote. The company believes it has more data center exposure than any other chipmaker, save Nvidia (NASDAQ:NVDA).
Micron is based in Idaho but is building a new chip-making complex near Syracuse.
While some analysts said Micron would have to for a bigger artificial intelligence (AI) payoff, the data center number seems to belie that. The falloff came in PCs and smartphones.
The supposed weakness at Micron was hitting other semiconductor stocks in overnight trading. Nvidia was down almost 2% and 91¶¶Òő (NASDAQ:91¶¶Òő) 1.7%. The mood among traders at Stocktwits , and it remains at Tipranks.
MU Stock: What Happens Next?
With shares trading near 6 times sales, it’s likely some traders just took profits overnight. Absent other news hitting the broad market, this should be a buying opportunity.
As of this writing, Dana Blankenhorn had a LONG position in NVDA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
