Micron Shares Drop On Weak Quarterly Forecast, AI Gains Overshadowed

Micron Technology shares plunged 15% in premarket trading last week following a disappointing forecast, which highlighted weak demand for personal computers and smartphones.

Micron is one of only three major HBM chip suppliers, alongside South Korea's SK Hynix and Samsung. I Photo: Micron Technology Facebook

The news eclipsed gains from the company’s AI-related chip sales, Reuters reported.

The market for dynamic random-access memory (DRAM) chips—Micron's primary revenue source—remains under pressure due to a lingering supply glut that began after the pandemic.

Analysts at Morgan Stanley noted that the DRAM market "appears unhealthy and is slowly deteriorating," with oversupply being most evident in older technologies.

Micron projected low single-digit percentage growth for smartphone sales in 2025. Additionally, global PC shipments fell 1.3% in the third quarter to 62.9 million units, according to Gartner.

Despite these challenges, revenue from Micron’s high-bandwidth memory (HBM) chips—used in advanced AI systems—more than doubled sequentially. Piper Sandler analysts noted, “Micron’s HBM story remains intact as the company is well-positioned to leverage data center investments expected in 2025.”

Micron is one of only three major HBM chip suppliers, alongside South Korea's SK Hynix and Samsung.