All Eyes on Micron Stock Ahead of Earnings — Here's What Stifel Expects
Micron (NASDAQ:MU) is set to report its fiscal Q3 earnings (May quarter) after the market closes on Wednesday (June 25), and a lot is at stake as MU shares have gained ~90% since the April lows.
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That strong run informs Stifel analyst Brian Chin's take ahead of the print.
'We expect Micron's F4Q(Aug) guidance to exceed our estimates,' the analyst said, 'however the bogey will be higher now given the stock's rally has coincided with DDR4 prices rallying (some exposure, though perhaps less than anticipated).'
Over the past month, DDR4 (1GB) spot prices have risen from just over $2 to more than $3–4, boosting sentiment around Micron and other DRAM-leveraged names. The analyst expects the company will take advantage of this strength by opportunistically selling to non-specialty customers. However, Chin notes that Micron previously indicated DDR4 would represent roughly 10% of second-half sales, consistent with the company's and its peers' plans to shift focus away from DDR4 production in favor of DDR5.
Another area of interest heading into earnings is that of HBM competition and positioning, where Chin's recent checks indicate that Samsung has lowered its HBM shipment forecast for 2025 by another ~20%, likely due to ongoing challenges in qualifying its 12-Hi HBM3E with Nvidia.
'We continue to view MU as a share-gainer in HBM, and expect 12- Hi HBM3E to be a more significant driver over the ensuing quarters enroute to the company meeting/exceeding its targeted 20%+ share exiting the CY,' Chin went on to say.
Micron's recent move to begin sampling HBM4, just three months after SK Hynix, is also a 'positive sign,' suggesting that a market share target of over 30% is not out of the question. Additionally, the company plans to realign its segment reporting to separately disclose AI datacenter revenue – including HBM – and the associated gross and operating margins.
'We believe this disclosure could reflect favorably on the company,' Chin opined.
As for the raw results, for FQ3, Chin is calling for revenue and non-GAAP EPS of $8.75 billion and $1.55, respectively, compared to Street estimates of $8.84 billion and $1.59. Micron is guiding for revenue between $8.6 billion and $9.0 billion, and EPS between $1.47 and $1.67. That said, interestingly, the analyst expects the results to exceed both their own forecast and consensus, with bit shipments for the May quarter likely boosted by a pull-forward in PC and smartphone production – along with associated memory chip demand – as these products remain exempt from elevated reciprocal tariffs.
All told, Chin rates MU shares a Buy, though his $130 price target implies only a modest 6% upside from current levels. (To watch Chin's track record, click here)
Overall, Micron holds a 'Strong Buy' consensus rating, backed by 12 Buy recommendations and 3 Holds. The average price target sits at $121.67, indicating that analysts expect the stock to stay rangebound – at least until earnings drop and models get an update. (See MU stock forecast)
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