Micron Heads For Worst Day Since 2020 After Disappointing Forecasts

Micron Shares plunged 16% on Thursday, heading for their worst day since March 2020 and the start of the Covid pandemic, after the chipmaker issued disappointing second-quarter guidance in its earnings report.

The stock fell to $86.78 in early afternoon trading, about 45% below its all-time high in June.

For the fiscal second quarter, Micron said it expects revenue of $7.9 billion, plus or minus $200 million, and adjusted earnings per share of $1.43, plus or minus 10 cents. Analysts had expected revenue of $8.98 billion and earnings per share of $1.91, according to LSEG.

On the earnings conference call, CEO Sanjay Mehrotra said the company, which provides memory and storage for computers, is seeing slower growth in consumer device parts and is experiencing “inventory adjustments.”

“Micron expects a further delay in the PC upgrade cycle and cited pockets of high customer inventory in smartphones,” Stifel analysts wrote in a report to clients. The company maintained its buy rating on the stock but lowered its price target to $130 from $135.

Micron reported better first-quarter earnings, with earnings per share of $1.79, beating analysts’ average estimate of $1.75. Revenue rose 84% from a year earlier to $8.71 billion, meeting estimates. The growth was driven by a 400% increase in data center revenue due largely to demand for artificial intelligence. micron said.

“We continue to gain share at the highest margin and in strategically important parts of the market and are exceptionally well positioned to leverage AI-driven growth to create substantial value for all stakeholders,” the company wrote in its report.

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