Micron (NASDAQ:MU) Shares Outlook

Investing.com — Micron shares could see a sharp upward move if the memory chipmaker’s upcoming earnings results and guidance align with expectations, according to Wedbush analysts.

Upcoming Earnings Report

The company is set to report financial results for the fiscal first quarter on Wednesday. Wedbush analysts believe the results are “achievable, if not beatable” as strong September pricing and favorable mix shifts could help Micron meet or even exceed November guidance.

February Quarter Challenges

Looking ahead to the February quarter (fiscal Q2), the setup appears more challenging, as conditions for NAND and DRAM memory deteriorated significantly in November. Contract pricing has settled later and lower than anticipated, driven by:
– Inventory reductions by client device original equipment manufacturers (OEMs)
– Price cuts from hyperscalers
– Delays in some Blackwell projects

Despite these challenges, Wedbush suggests the impact on Micron's fiscal Q2 estimates could be modest, thanks to continued shifts toward DDR5, eSSDs, and HBM.

Future Outlook

Wedbush foresees more favorable memory economics in the second calendar quarter of 2025 and beyond, predicting that client device OEMs will normalize inventory levels by late Q1 or Q2. This normalization may lead to memory demand better aligning with end market fundamentals.

Increased shipments of Blackwell servers to emerging cloud and AI customers are expected to boost memory demand from that sector.

Moreover, Wedbush predicts rising hyperscale spending throughout calendar year 2025, which might moderate temporary fluctuations in memory market dynamics anticipated in late 2024 and early 2025.

Analyst Sentiment

Following a recent trip to Asia, analysts observed extremely negative sentiment on memory, indicating potential for a sharp upward move in Micron's stock if results/guidance align with expectations. However, they noted some positioning has reversed in the past few days.

Overall, analysts don’t express a strong view on Micron ahead of the Q1 report but see the company as well-positioned for 2025, citing its transition to a more favorable product mix and expecting improvements in memory market fundamentals starting in Q2 2025 and continuing into the second half of the year.