Micron's stock drops due to weak forecast, overshadowing AI chip sales growth

From Investing.com: 2024-12-19 14:35:58

Micron Technology shares plummeted 15% due to a gloomy forecast showing weak demand for PCs and smartphones, despite strong growth in AI chip sales. The DRAM chip market remains pressured by oversupply and slow consumer demand post-pandemic. Micron’s flash memory chip revenue for fiscal 2025 is expected to be significantly weaker.

The transition to Windows 11 has been slower than anticipated following Microsoft’s end of support for Windows 10. Micron’s market value could drop by over $17 billion to $99 billion if losses persist. Revenue from high-bandwidth memory chips doubled sequentially, positioning the company to benefit from data center investments in 2025.

Micron’s HBM chips have helped drive its stock up 22% this year, with analysts predicting continued growth. Ten brokerages have reduced price targets on the stock post-results. Micron’s forward P/E ratio is 10.67, lower than Qualcomm and Advanced Micro Devices. The company is one of three HBM chip providers alongside SK Hynix and Samsung.



Read more at Investing.com: Micron slumps as bleak quarterly forecast clouds AI-related boost By Reuters