Micron Technology Stock Drops Over 5% In Pre-Market Despite Beating Q3 Revenue Estimates — Here's Why

Micron Technology, Inc., MU witnessed a 5.47% drop in its shares during Thursday’s pre-market trading, as per Benzinga Pro. This decline came on the heels of the company’s third-quarter earnings disclosure.

The company exceeded analyst estimates on both revenue and earnings per share (EPS). Micron reported a revenue of $6.81 billion, surpassing the consensus estimate of $6.634 billion, and an adjusted EPS of $0.62, beating analyst estimates of $0.49.

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The recent sell-off could be because investors ignored better-than-expected third-quarter results and focused on the fourth-quarter revenue forecast, CNBC reported on Thursday. Micron stated it anticipates adjusted EPS of $1.08 on $7.6 billion, plus or minus $200 million, in revenue for the current quarter. Analysts had expected earnings per share of $1.05 on $7.6 billion in revenue.

According to Gene Munster, managing partner at Deepwater Asset Management, the company’s AI story remains intact despite the stock sell-off. Munster noted that Micron’s High Bandwidth Memory (HBM) revenue, which accounts for 2% of the total revenue, is lower than in previous quarters. He predicted a 10-15% increase in HBM revenue for the next year, stating “Good news is the AI trade is intact.”

In June, Micron was reported to be planning an expansion of its HBM chip production in the U.S. and was considering manufacturing in Malaysia. The move was motivated to capture a larger share of the demand from the ongoing AI boom.

U.S. companies like Micron are positioned to gain from the CHIPS Act, backed by $32.8 billion in incentives from the U.S. government, strengthening their competitive advantage in the global chip market.

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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari