Micron Technology Posts 2Q Beat: Memory Cyclical Debate Continues, Signs Of Recovery Will Strengthen, Analysts Say

Shares of Micron Technology Inc. (NASDAQ:MU) tanked in early trading Friday, even after the company reported upbeat fiscal second-quarter results.

Here are some key analyst takeaways.

Rosenblatt Securities On Micron Technology

Analyst Kevin Cassidy maintained a Buy rating while reducing the price target from $250 to $200.

Micron Technology reported quarterly revenues of $8.05 billion, representing 38% year-on-year growth but down 8% sequentially, Cassidy said in a note. He added that the revenue was higher than the consensus of $7.9 billion.

Non-GAAP earnings came in at $1.56 per share, above consensus of $1.43 per share, while gross margins contracted to 37.9%, reflecting weaker NAND pricing, the analyst stated. "NAND Flash oversupply remains a drag on margins though we expect industry supply cuts can bring supply/demand at least into balance if not slightly favoring demand during the seasonally stronger 2HC25," Cassidy wrote.

Check out other analyst stock ratings.

Stifel On Micron Technology

Analyst Brian Chin reiterated a Buy rating and price target of $130.

Chin said that NAND bit shipments remained "surprisingly resilient" in the fiscal second quarter, while an uptick in DRAM shipments is projected in the fiscal third quarter. Management's revenue and earnings guidance for the fiscal third quarter came in at $8.60-$9.00 billion and $1.47-$1.67 per share, versus consensus of $8.48 billion and $1.52 per share, respectively, he added.

Chin stated that DRAM and NAND bit shipments are expected to grow sequentially across consumer and data centers, with growth skewed towards DRAM. "The memory cyclical debate is likely to rage on given macro uncertainty, yet based on tightly managed supply in the NAND market and better demand footing in DRAM, we expect the signposts toward recovery to improve."

Needham On Micron Technology

Analyst Quinn Bolton reaffirmed a Buy rating and price target of $120.

Micron Technology reported an upbeat quarter and its guidance reflects "strength in HBM along with improved demand and inventory in most other product groups," Bolton said. He added that HBM grew more than 50% sequentially to surpass $1 billion in revenue.

The company raised the 2025 market total addressable market (TAM) for HBM from $30 billion to $35B billion, "driven by strong volume shipments along with ASP increases as 12-high solutions ramp in C2H25," the analyst wrote. Bolton further stated that Micron Technology projected non-GAAP gross margin to contract to 36.5% at the midpoint in the fiscal third quarter, below Street expectations of 37.4%.

MU Price Action: At the time of publication on Friday, shares of Micron Technology had declined by 6.98% to $95.81.

Read More: Score Profits From Traders Dumping The Magnificent 7 

Photo: Shutterstock