For the second time this year, Micron (MU) disappointed shareholders. The stock tumbled in mid-June 2024 and again last week. MU stock lost 12% last week.
Shareholders did not expect Micron to suffer from weak NAND flash memory sales. In the first quarter, the weak revenue led Bank of America Securities to cut its rating to Neutral, down from a Buy. It lowered its price target by $15 to $110. Morgan Stanley cut its price target from $114 to $98.
On the conference call, Micron executives said that HBM growth continued on a good trajectory. Thanks to data center revenue strength, demand for HBM was robust. However, data center SSD weakened in the near term. The industry is facing a slowdown after several quarters of robust growth. As a result, this will drag Micron’s performance through both the fiscal and calendar year lower.
Micron is the second or third biggest NAND and SSD supplier in the market. This would imply higher competition ahead, hurting profit margins. To sustain margins, Micron has massive SSDs that are in the 30 to 60-terabyte ranges. The 9550 model, for example, is the fastest SSD in the world. Customers that one the best-performing hardware will pick Micron over Samsung (SSNLF).
Add MU stock to your watchlist. The stock might stop falling from here.
