$Micron Technology(MU)$ is expected to report the quarterly earnings for the period ending 28 February 2025 on 20 March 2025 after market close.
Micron is expected to show an increase of 35.5% increase in the quarterly revenue to $7.892 billion from $5.82 billion compared to same period one year ago. This revenue estimate is inline with Micron’s guidance given on 18 Dec 2024 which indicate revenue for the period ending 28 Feb 2025 to be between 7.70 billion and 8.10 billion.
The earnings per share is expected to come in at $1.43 which represent more than 200% increase compared to same period one year ago.
Micron Technology (MU) Last Neutral Earnings Call Saw Share Price Modest Decline Of 1.97%
Micron had a neutral earnings call on 18 Dec 2024 and the share price only saw a modest 1.97% decline.
The earnings call presented a mixed outlook with strong growth in the data center segment and leadership in advanced memory technologies like HBM and LPDDR5X. However, challenges in the NAND market and consumer segments, along with pressure on gross margins, present headwinds. While there are significant achievements and a positive outlook for certain segments, the negative aspects balance out the positive news.
Micron Technology (MU) Guidance On AI and Data Center Business
In the first quarter of fiscal 2025 earnings call for Micron Technology (MU), the executives provided guidance on several key metrics affecting their business outlook. They discussed a projected 100 basis point decline in gross margins for Q2, largely attributed to challenges in the NAND market, including mix, pricing, and lower shipments. The executives highlighted the robust growth trajectory of High Bandwidth Memory (HBM) and data center DRAM, despite a temporary moderation in data center solid-state drives (SSD) and consumer-oriented segments. They noted that data center SSDs accounted for about 65% of their overall NAND business, with a market share reaching approximately 14% in Q3 of the previous year. The company anticipates a sequential increase in bit shipments starting in fiscal Q3, driven by the expected recovery in data center capital expenditures and improved demand conditions. Additionally, they mentioned that their actions to reduce NAND wafer starts are in response to challenging market conditions, aiming to align supply growth with demand forecasts.
Overall, the company remains optimistic about their data center business, expecting continued strength in DRAM and NAND shipments through fiscal and calendar 2025.
Key Metrics to Evaluate For Micron Technology (MU) Earnings
Revenue Growth
YoY/QoQ Growth: Micron’s business is cyclical, tied to DRAM/NAND pricing and demand. Data Center segment showed a robust growth trajectory, with record-setting revenue and market share performance. Data center revenue grew 40% sequentially and 400% year-over-year in FQ1, now making up over 50% of overall revenue.
End-Market Mix: Data center (AI/cloud), PC, smartphone, automotive, and industrial demand. Micron increased its market share in enterprise and data center SSDs, reaching approximately 14% in Q3 and growing sequentially in fiscal Q1. This segment now accounts for about 65% of their overall NAND business.
Average Selling Prices (ASP): Monitor pricing trends for DRAM (70% of revenue) and NAND (25%).
Profitability
Gross Margin: Critical for memory companies. Look for improvements driven by higher pricing, cost-cutting (e.g., advanced node transitions like 1-beta DRAM, 232-layer NAND), and better inventory management.
Gross margin is under pressure due to NAND market conditions and underload charges, impacting fiscal Q3 by approximately 100 basis points.
Inventory Levels
Days of inventory (DOI): High inventory can signal oversupply, while normalization suggests demand recovery. Micron’s inventory peaked at ~160 days in FY2023; watch for reductions.
Free Cash Flow
Capital-intensive industry; track progress toward positive FCF as pricing recovers.
Macro and Industry Factors:
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Memory Market Cycle: DRAM/NAND prices are rebounding in 2024 after a 2023 downturn. Q2 2025 could reflect mid-cycle growth if demand outpaces supply.
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AI and Data Center Demand: High Bandwidth Memory (HBM) for AI accelerators (e.g., NVIDIA GPUs) is a key growth driver. Micron’s HBM3E production (launched in 2024) could boost margins.
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Consumer Electronics: PC/smartphone recovery and AI-enabled devices (e.g., AI PCs).
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Geopolitical Risks: Export restrictions on advanced chips to China (25% of Micron’s revenue) and supply-chain diversification.
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Input Costs: Semiconductor materials, energy, and equipment pricing.
Strategic Initiatives to Monitor:
HBM Leadership: Micron’s ramp-up of HBM3E for AI chipsets (competes with Samsung/SK Hynix). Margins for HBM are ~2x traditional DRAM. Micron is leading the market in LPDDR5X and HBM technologies, with significant innovations and strong demand from data centers. They expect to achieve their natural bit share in HBM by the second half of calendar 2025.
Advanced Node Transitions: Cost reductions via 1-beta DRAM and 232-layer NAND. Micron announced industry-leading products such as the 9550 fastest SSD and the first PCIe Gen5 60-terabyte SSD on the market, contributing to a solid performance.
CHIPS Act Funding: U.S. government subsidies for domestic semiconductor manufacturing (e.g., Idaho fab expansion). NAND-related market conditions remain challenging, impacting Q2 results with a meaningful decline in NAND volume. A significant portion of the sequential revenue decline in Q2 is attributed to NAND.
AI Partnerships: Collaborations with cloud providers (AWS, Microsoft) and GPU makers (NVIDIA, AMD).
Competitive Landscape:
DRAM/NAND Market: Samsung (43% DRAM share), SK Hynix (28%), and Micron (25%). SK Hynix leads HBM production. As HBM capacity increases, there is a significant impact on conventional DRAM capacity due to a trade ratio effect, potentially affecting overall DRAM supply.
Pricing Discipline: Industry-wide capacity cuts in 2023 could stabilize pricing by 2025. Near-term outlook impacted by delays in the PC refresh cycle and cautious consumer segment demand. Inventory levels at customers remain high, affecting shipment rates.
Micron Technology (MU) Price Target
Based on 24 Wall Street analysts offering 12 month price targets for Micron in the last 3 months. The average price target is $133.24 with a high forecast of $250.00 and a low forecast of $91.00. The average price target represents a 30.99% change from the last price of $101.72.
I think there are certain factors that we need to watch for Micron upcoming earnings.
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HBM Revenue Contribution: Progress in capturing AI-related market share.
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Pricing Power: DRAM/NAND ASP trends and supply-demand balance.
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Inventory Normalization: Alignment with demand to avoid write-downs.
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Guidance: Commentary on AI-driven demand sustainability and capex plans.
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China Market: Impact of export controls and domestic competition (e.g., CXMT, YMTC).
Technical Analysis - Exponential Moving Average (EMA)
Micron have been performing despite the market selloff and weakness in the semiconductor sector, we can see that it has hold well this week above the 200-day period and we are seeing strong momentum from RSI, where it is increasing towards overbought region.
We need to watch how the bulls could continue to hold this daily uptrend and I believe the bulls is still trying to build a daily uptrend expansion.
I will be building a position if the price stabilize around the $101 level.
Summary
Micron’s Q2 2025 results will hinge on memory pricing, HBM adoption, and execution in a cyclical recovery. If AI-driven demand persists and supply remains tight, margins could exceed expectations.
I would think that Micron could benefit from the AI demand in terms of memory pricing as the focus might be shifting in terms of CAPEX, and currently Micron price looks undervalued.
Appreciate if you could share your thoughts in the comment section whether you think Micron could provide an earnings surprise with a significant price move.
@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.
Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.
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