Micron Technology: A Second Chance in the Semiconductor Market?

Micron Technology is attracting investors' attention before it releases its earnings report on Wednesday. These results are among the last significant announcements before the year ends. An analyst recently confirmed his buy recommendation and suggested an optimistic price target. Micron's stock performed strongly at the beginning of the year but has declined since July. This development is due to skepticism about non-artificial intelligence areas within the semiconductor sector. Analyst Danley expects that Micron may fall short of general expectations for the current quarter, due to weak demand in the PC and smartphone markets. Nevertheless, Danley sees potential: The excess DRAM inventories in these markets, which together account for 50% of revenue for fiscal year 2024, should decrease by spring. This weakness is also offset by the strength in the data center market, which accounts for 35% of revenue. Micron is experiencing opposing currents: While demand for high-performance DRAM products for AI is increasing, other end markets continue to suffer from a downturn that has persisted since 2022. Yet Danley believes that positive developments will outweigh the negative ones in 2025. What to watch for on Wednesday: Wall Street analysts expect revenue of $8.71 billion and an adjusted earnings per share of $1.77 for Micron on Wednesday. However, comments and future outlook are just as important, if not more so, than the mere numbers. If Micron just narrowly misses expectations—$8.99 billion in revenue and $1.94 earnings per share—a potential drop in price could provide a further buying opportunity. Demand for DRAM memory is growing in the age of AI, and Micron has recently performed well.