Micron Stumbles with Weak Guidance, Shares Dive Over 12%

Micron Technology (NASDAQ:MU) faced a steep selloff as its second-quarter guidance fell significantly short of market expectations, sending shares plunging by over 12% in pre-market today. The semiconductor giant's bleak forecast has rattled investor confidence, highlighting persistent challenges in the memory chip market.

For the upcoming quarter, Micron projected adjusted earnings between $1.33 and $1.53 per share, falling well below the consensus estimate of $1.97. Revenue expectations were similarly underwhelming, with the company forecasting $7.90 billion, plus or minus $200 million, a far cry from analysts’ prediction of $8.97 billion.

The guidance reflects ongoing struggles in the chip sector, driven by a slowdown in demand for data center solid-state drives (SSDs), sluggish inventory turnover, and an oversupply of NAND memory. The company also warned of weaker-than-anticipated bit shipments, compounding market concerns.

Despite the near-term challenges, Micron remains optimistic about the future, emphasizing its strategic focus on high-margin market segments and opportunities linked to AI-driven growth. While consumer markets are currently under pressure, the company expects to regain momentum in the latter half of its fiscal year.

In its first-quarter results, Micron delivered better-than-expected earnings of $1.79 per share, surpassing the $1.73 analyst consensus. Revenue reached $8.71 billion, narrowly beating estimates of $8.68 billion. Growth in the data center segment and a 20% sequential increase in DRAM revenue, including a doubling of High-Bandwidth Memory (HBM) revenues, were key contributors to the solid performance.