Micron Technology Inc. (NASDAQ:MU) stock fell more than 5% in Friday’s premarket session after soaring 15.74% in Thursday’s regular trading session, as investors took profits following the memory chipmaker’s upbeat earnings report. The decline also came as broader market sentiment weakened, with S&P 500 futures down 0.6% before the opening bell.
Strong Results, But Profit-Taking Takes Hold
Micron reported adjusted earnings per share of $25.11 on revenue of $41.46 billion, while adjusted gross margin reached 84.9%. The company also forecast fiscal fourth-quarter adjusted EPS of about $31 on revenue of roughly $50 billion.
Management said it has signed multi-year strategic customer agreements designed to make revenue and earnings more predictable. Analysts also pointed to sustained pricing strength for AI-focused DRAM and NAND memory as another positive sign for the business.
Even so, the broader risk-off mood weighed on high-growth semiconductor stocks, prompting investors to lock in gains after Micron’s sharp rally.
Bank Of America Sees Structural Memory Shift
Bank of America Securities analyst Vivek Arya told CNBC on Thursday that the memory industry is seeing a structural shift rather than a typical cyclical upswing, driven by AI demand and tighter supply discipline.
The analyst said AI depends heavily on memory, while high-bandwidth memory is three to four times harder to produce than conventional chips.
He said Micron’s results showed stronger cycle durability, supported by agreements with 16 customers that provide multi-year visibility into supply, pricing, and units.
Arya said memory now accounts for about 35% to 40% of cloud capital spending, and the supply-demand imbalance could last at least through the end of next year.
The analyst said AI infrastructure deployment should continue through the end of the decade, though growth may not remain at 60% to 70% annually.
He added that Micron remains inexpensive despite its rally, trading at less than 10 times forward earnings, while NVIDIA Corp. (NASDAQ:NVDA), Broadcom Inc. (NASDAQ:AVGO), and Micron all trade below the S&P 500 multiple.
Technical Picture Remains Bullish
Despite Friday’s pullback, Micron remains in a strong long-term uptrend.
The stock trades 12.8% above its 20-day simple moving average, 46.6% above its 50-day SMA and 174.7% above its 200-day SMA. Those large gaps suggest the shares remain extended after a powerful rally and could see additional short-term volatility if buyers fail to defend key support levels.
Momentum indicators also remain constructive. The MACD stays above its signal line, indicating bullish momentum remains intact even as the stock retraces from recent highs.
Micron recently reached a 52-week high of $1,255 in June after rebounding sharply from its April low. So far, the latest decline appears to be a normal pullback rather than a reversal of the broader uptrend.
Key resistance is $1,255, while the nearest support is the 20-day SMA at $1,024.97.
Analysts Remain Bullish
The stock carries a Buy consensus rating from 50 analysts, with an average price forecast of $1,477.17. Recent analyst actions include:
- Barclays: Overweight; raised price forecast to $2,000 on June 25.
- Citigroup: Buy; raised price forecast to $1,400 on June 25.
- Goldman Sachs: Neutral; raised price forecast to $1,100 on June 25.
Micron trades at roughly 27.4 times forward earnings, reflecting expectations for continued AI-driven growth.
Benzinga Edge Snapshot
Micron continues to score highly on Benzinga Edge metrics.
Its Momentum score stands at 99.73, while Quality is 98.30 and Growth is 85.18. The Value score is 15.94, indicating investors are paying a premium for the company’s growth prospects.
The combination suggests Micron remains a strong momentum stock. However, elevated expectations could make the shares more sensitive to market pullbacks.
ETF Exposure
Micron is a major holding in several semiconductor-focused exchange-traded funds:
- Invesco S&P 500 Momentum ETF (NYSE:SPMO): 8.39% weighting
- Invesco PHLX Semiconductor ETF (NASDAQ:SOXQ): 9.78% weighting
- Global X AI Semiconductor & Quantum ETF (NASDAQ:CHPX): 7.88% weighting
Large inflows or outflows in these funds can create additional buying or selling pressure on Micron shares.
Price Action
MU Stock Price Activity: Micron Technology shares were down 5.24% at $1150.00 during premarket trading on Friday, according to Benzinga Pro data.
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