Micron Technology: Mizuho trims PT on weak guidance, headwinds in PC market

Mizuho (NYSE:MFG ) analysts have lowered their price target for Micron Technology Inc (NASDAQ:MU ), citing the memory chip giant's weak near-term guidance and continued headwinds in the PC and smartphone markets.

Despite robust growth in high-bandwidth memory (HBM), analysts trimmed estimates due to softer-than-expected revenue and margin projections for the upcoming quarter.

Mizuho maintained an “Outperform” rating but lowered the price target to $115 from $135.

Micron delivered in-line results for its November quarter, reporting revenue of $8.71 billion and earnings per share of $1.79, matching consensus expectations. However, the February quarter guidance fell significantly short, with revenue projected at $7.9 billion, compared to the $8.97 billion consensus estimate, analysts wrote.

Gross margins are also expected to decline to 38.5%, down from 39.5% in the prior quarter, as weak NAND pricing offsets gains from HBM, according to Mizuho.

The highlight of Micron’s performance was its HBM segment, which saw revenue more than double quarter-over-quarter. Mizuho noted that Micron is capitalizing on surging demand for AI-driven memory solutions, with HBM projected to account for $4 billion in revenue in fiscal 2025.

Micron’s market share in HBM is expected to grow from 5-7% currently to 20-25% by late 2025, driven by strong partnerships, including Nvidia (NASDAQ:NVDA ) Blackwell GPUs, according to Mizuho.

While Mizuho remains bullish on Micron’s long-term positioning in the AI race, the near-term challenges in traditional DRAM and NAND markets prompted the lower price target.

Micron’s $14 billion fiscal 2025 capital expenditures, largely focused on HBM and R&D, reflect its commitment to leading-edge memory solutions despite current market softness, analysts added.

Source: Investing.com