Micron stock plummets as weak outlook overshadows AI opportunity
Published On Dec 19, 2024, 10:35 AM
Micron Technology reported a disappointing outlook, with expected revenue for the upcoming quarter between $7.7 billion and $8.1 billion, significantly lower than the $9 billion Wall Street anticipated. This news caused Micron's stock to drop over 17%. Despite strong growth in demand for AI chips, particularly for its high bandwidth memory (HBM) used in GPUs for AI applications, Micron's overall revenue is affected negatively by weak demand in consumer markets, particularly for smartphone and PC chips. While Micron's CEO emphasizes the company's potential in the AI sector, analysts are cautious, with several lowering their price targets despite maintaining their Buy ratings on the stock.
Stock Forecasts
MU
Negative
Micron's stock price reaction to its weak guidance indicates that investor sentiment may be influenced more heavily by short-term revenue concerns than long-term AI growth prospects. The significant decline suggests that market participants are currently prioritizing caution given the sluggish market for traditional semiconductors. Thus, while Micron has potential upside based on AI-driven opportunities, immediate market conditions are unfavorable.
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