Semiconductor company Micron Technology (MU) is scheduled to announce its results for the second quarter of Fiscal 2025 after the market closes on Thursday, March 20. The memory and storage solutions specialist is gaining from the ongoing artificial intelligence (AI) boom, which has created solid demand for its high bandwidth memory (HBM) solutions. Analysts expect Micron’s Q2 FY25 adjusted earnings per share (EPS) to jump 240% year-over-year to $1.43.
Meanwhile, revenue is expected to increase 36% to $7.9 billion. While Micron’s Data Center revenue is well-positioned to gain from AI-led demand, the company has cautioned previously about slower growth in Q2 FY25 in some parts of the consumer devices market and inventory adjustments.
Analysts’ Views Ahead of Micron’s Q2 Earnings
Heading into the Q2 FY25 results, Stifel analyst Brian Chin reiterated a Buy rating on MU stock with a price target of $130. The 4-star rated analyst expects Micron to largely meet Stifel’s and the Street’s consensus expectations. However, Chin lowered his Q3 FY25 estimates to reflect persistent softness in memory pricing and a less favorable shift in mix toward consumer offerings from enterprise/hyperscaler. The analyst noted that this transition is already known as the management recently cautioned about a decline in the Q3 FY25 gross margin.
The analyst is more optimistic about the prospects in the quarters ahead, specifically due to the potential for improving NAND pricing starting in the second quarter (calendar quarter). Chin also noted a few positives on memory demand, mainly from China. The analyst sees Q4 FY25 as the more likely point where Micron’s key P&L (profit & loss) metrics re-accelerate on more subdued-to-favorable pricing, seasonal/cyclical recovery in bit demand, and execution on its higher gross margin, HBM ramp.
Meanwhile, Citi analyst Christopher Danely reaffirmed a Buy rating on Micron stock with a price target of $150. Danely expects Micron to report “decent” Q2 FY25 results but miss the Street’s guidance expectations due to an unfavorable consumer mix and NAND underutilization charges. However, the four-star analyst believes that DRAM pricing should improve beginning in Q2 2025, given the inflection in mainstream DDR5 DRAM product’s spot pricing. Overall, Danely remains bullish on Micron stock due to the growth potential of the company’s AI HBM offering and DRAM recovery, driven by supply/demand dynamics in 2025.
Options Traders Anticipate Major Move on Micron’s Q2 Earnings
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you.
Indeed, it currently says that options traders are expecting about 10.8% move in either direction in reaction to MU’s Q2 FY25 results.
Is Micron a Good Stock to Buy?
Given the AI-led demand, Wall Street has a Strong Buy consensus rating on Micron stock based on 22 Buys and two Hold recommendations. The average MU stock price target of $133.24 implies about 29.2% upside potential from current levels. MU stock has rallied more than 22% so far this year.
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