Micron Technology Inc (NASDAQ:MU) is expected to report fiscal second quarter financial results in line with its guidance, with analysts at Wedbush expecting “modest deviations” from the company’s projections.
They see potential revenue upside but some margin risk due to softer pricing in Q1 and changes in product mix.
The company guided revenue of $7.9 billion plus or minus $200 million and earnings per share in the range of $1.33 to $1.53.
While Micron had previously indicated that its Q2 results would likely align with its initial guidance, there is a possibility of slightly better-than-expected bit shipments, driven by a pickup in client device demand in February, the analysts believe.
However, pricing for both DRAM and NAND could continue to pressure margins, potentially placing them in the lower half of the previously outlined range.
Long-term prospects
Looking ahead to fiscal Q3, Micron expects its revenue to improve quarter-over-quarter on improved shipment levels and a rebound in client demand, particularly from the normalization of customer inventory levels.
“However, Micron also expects this dynamic to yield a shift in mix towards lower margin parts will weigh on margins to the tune of a few hundred basis points,” Wedbush noted.
The analysts remain optimistic about Micron’s long-term prospects, citing the normalization of memory inventories at OEMs and continued strong demand in key areas such as high bandwidth memory (HBM) and enterprise SSDs for cloud and AI applications.
Additionally, spending from hyperscale customers is expected to continue lifting demand throughout 2025, helping to offset any temporary dips in the memory market.
“Conversely, we would be remiss if we didn't note some risk tied to the US administration's policies and in particular continued or new tariffs given both potential disruption in pricing and supply chains for electronic goods, and risk to the broader macro environment,” the analysts noted.
They awarded Micron an ‘Outperform’ rating and a $125 price target.
Shares of Micron traded hands at $102 on Monday.
The company will hand down its Q2 earnings report on March 20, after US markets close.