Micron Technology Inc (NASDAQ:MU) has been downgraded by Bank of America to ‘neutral’ from ‘buy’, with analysts citing underwhelming sales guidance and ongoing margin pressure.
Micron underwhelmed with its second-quarter guidance on Wednesday as the chipmaker delivered a forecast of $7.9 billion, missing both BofA's estimate of $8.3 billion and the consensus forecast of $9 billion.
Gross margins for the quarter were forecast at 38.5%, below expectations of 40%.
BofA highlighted persistent weaknesses in the PC and phone markets as key drivers of the downgrade. Challenges in NAND flash memory pricing and inventory management are also expected to weigh on performance.
Despite the headwinds, Micron’s growing presence in the high-bandwidth memory (HBM) market, particularly for artificial intelligence applications, remains a bright spot, noted BofA analysts.
However, elevated inventory levels and pricing pressures in the NAND segment are expected to continue impacting financial performance into the first half of 2025.
BofA cut its Micron price targets from $125 to $110.00. Snares plummeted 17% to $86.4 on Thursday in response to the underwhelming sales guidance.