After positive earnings exceeded expectations, Micron was the second-worst-performing stock on the S&P 500 on Friday; some analysts voiced concern about reduced profits in the main memory division of the chip firm.
The poorest performer on the Nasdaq 100, Micron Technology Inc. (MU) had shares down almost 8% in active trading on the Nasdaq COMP. Dow Jones Market Data indicates that it was the second-worst performer on the S&P 500 SPX, so it also contributed drive down that index.
Micron posted on Thursday higher than expected fiscal second-quarter results. On the company’s discussion with analysts, management addressed concerns with the main memory business – including startup costs for a new dynamic random access memory chip plant in Idaho – that led some analysts to cut profit projections or downgrade the stock.
Although Micron’s high-bandwidth memory for artificial- intelligence servers exceeded $1 billion in income, it was insufficient to increase general profitability.
Although Micron’s high-bandwidth memory’s demand drove better-than-expected earnings, Angelo Zino, an analyst with CFRA Research, noted that the company’s gross margin outlook “was generally in line, but a disappointment to many.” “Zino lowered his earnings estimates for fiscal 2025, which ends in August, which ends from $7.39 a share, and for fiscal 2026 to $10.98 from $11.40, on a more conservative margin profile.”
Although BofA analyst Vivek Arya enjoys Micron’s high-bandwidth artificial intelligence memory business, “we are surprised it’s not helping Micron’s profitability,” he said to clients in a note. “Micron’s gross margins remain weak notwithstanding record sales from AI tailwinds.” For the fiscal third quarter, Micron guided to gross margins of 36.5%—down from 37.9% in the second quarter. Margues in the fourth quarter are likely to rise “only slightly.” Arya reiterated a neutral assessment of the stock and somewhat reduced forecasts.
Furthermore, Raymond James analyst Srini Pajjui notes in the company’s NAND, or flash, segment, average selling prices dropped roughly 18% in the quarter. He also mentioned that consumer product inventories—which had been accumulating—are beginning to stabilize. Examples of these products include cellphones.
Micron executives discussed last quarter declining NAND business circumstances and a build-up of inventory in the consumer categories where inventory changes were in progress.
Closing at $89.05, Micron’s stock was on its lowest close since March 11, 2025.
