Micron Technology's Price Target Lowered by Needham, Shares Down 3%

Micron Technology (NASDAQ:MU) faced a stock decline of over 3% on Monday, following a more cautious outlook provided by Needham & Company analysts, who lowered their price target from $150 to $140.

While still maintaining a Buy rating on the stock, Needham raised concerns about Micron's near-term performance, particularly with potential risks to November estimates.

Micron adjusted its forecast for fiscal Q1 2025, projecting flat bit shipments for both DRAM and NAND quarter-over-quarter. This contrasts with the company's earlier guidance for fiscal Q4 2024, which had predicted modest growth in DRAM and a slight increase in NAND shipments.

Needham's analysts pointed out that this more cautious outlook signals softening demand, prompting the firm to lower its forward estimates and price target. One key factor in this shift is Micron's decision to move away from aggressive pricing tactics, as demand has moderated with customers having stocked up on inventory earlier in the year.

Looking further ahead, Micron remains optimistic about fiscal 2025, particularly with expectations of strong demand for High Bandwidth Memory (HBM). However, the firm noted that non-HBM supply could be tight, with inventory shipments expected to help meet rising demand. Despite this optimistic long-term view, the company continues to face challenges in various sectors, including PC, smartphone, automotive, and consumer products. Market weakness in these areas remains a concern for the near term, alongside potential downward pressure on average selling prices.

While Micron is positioning itself for future growth, the company's deliberate shift in strategy could create headwinds in the short term, as flagged by Needham's revised guidance.