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Takeaways
- Micron stock slid Friday following the company's fiscal second-quarter results.
- Several analysts, however, maintained bullish rating, based in large part on an improved outlook of its DRAM chips.
- Investors may have reacted to Micron's gross margin projections, which one analyst called a "fly in the ointment."
Micron Technology’s (MU) shares fell on Friday, following the company’s fiscal second quarter results a day before. However, analysts remain bullish.
Micron “has established technological leadership in [high-bandwith memory]UBS analysts stated after the results that its DRAM chip division “should operate in a more sustained supply/demand dynamic, as long AI continues to grow.” The bank’s “buy” rating was maintained at $130.
Micron shares have dropped despite initially increasing after the results are released. Around 8% intraday on Friday. The chipmaker’s forecast for revenue and profit was above Wall Street expectations, but UBS called the company’s comments on gross margins “a bit of a snag in the ointment.”
Citi analysts reiterated a “buy rating” but cut their price target to $120 from $150 “given Micron’s persisting gross margin issues.” The bank increased its estimates for full-year earnings per share and sales, due to expected improvements in DRAM markets. Wedbush increased its price target from $125 to $130, while Bank of America remained at $110.
