Micron Stock (MU) Tumbles Despite Q4 Earnings That Shattered Expectations

Another earnings beat meets Wall Street's fickle expectations.

THE HIGH-BAR PARADOX

Micron clears a towering earnings hurdle only to face immediate sell-off pressure. The chipmaker delivered Q4 numbers that should've sparked rallies—instead triggering algorithmic retreats.

QUARTERLY WHIPLASH

Traders dumped MU stock despite fundamentals screaming strength. Memory chip demand surges across AI and data centers, yet share prices defy logic. Classic case of 'buy the rumor, sell the news' meets institutional profit-taking.

MARKET MECHANICS

When solid earnings collide with inflated expectations, even stellar results become selling catalysts. The street priced in perfection—then punished Micron for merely being excellent. Because nothing satisfies traders quite like a good paradox.

Another reminder that fundamentals and stock prices sometimes communicate through different universes. But for those tracking actual performance? Micron just proved it can run with the tech giants—even if Wall Street temporarily forgot how to read a balance sheet.

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As of 1:50 p.m. EDT, MU stock was down almost 4% to about $150 per share.

This came as the stock reversed earlier gains made during early trading on Wednesday morning when the investors cheered its stronger-than-expected performance. Deutsche Bank (DB) analyst Melissa Weathers, joining other analysts in hailing Micron’s performance, said the company “cleared a very high bar”.

Micron manufactures a range of memory chips, including High Bandwidth Memory (HBM) and Dynamic Random Access Memory (DRAM). HBM is an ultra-fast, layered memory that boosts performance for AI and big data tasks. Similarly, DRAM temporarily stores data to help computers and servers run efficiently and multitask seamlessly. Both are crucial for AI, gaming, and cloud computing.

Analysts Dissect Micron’s Performance

Micron, in its latest financial results, reported a 46% jump in sales from the same period last year. The company’s stock climbed as much as 5% in extended trading on Tuesday after the results were revealed.

The American manufacturer, which also designs computer data storage technologies, saw its revenue hit $11.3 billion, exceeding analysts’ forecast of $11.2 billion. Earnings per share also came in at $3.03, beating Wall Street’s $2.86.

Commenting on the performance, Micron CEO Sanjay Mehrotra noted the company “is uniquely positioned to capitalize on the AI opportunity ahead.”

Meanwhile, analysts have also swung into action, dissecting the Idaho-based company’s latest performance. While Bank of America Securities’ (BAC) Vivek Arya attributed it to the “dual-drivers” of fast-growing AI demand and supply in the memory chip industry, Barclays’ (BARC) analyst Thomas O’Malley pointed to the company’s “more aggressive” HBM strategy, with extra benefits emerging from rising prices in Micron’s embedded solid-state drive (SSD).

‘The Star of the Show’

Meanwhile, Micron in the recent quarter reported a gross margin of 45.7%, meaning that the company keeps 45.7 cents from every $1 in sales after covering direct costs like materials and labor. In her reaction, Deutsche Bank’s Melissa Weathers, who raised her price target for MU stock to a “conservative” $200—suggesting a 14% upside potential—praised Micron’s “stellar” gross margin as “the star of the show”.

Weathers expects Micron to maintain its margin performance and its HBM market share into next year. She sees the company piggybacking on factors such as a relatively tighter supply environment that will drive up cost and the sustenance of its low operating cost. expenditure.

On the other hand, BofA’s Arya is concerned that Samsung (SSNLF) entering the HBM market could pressure Micron’s market share. However, Weather noted that while pricing talks for 2026 are still ongoing, she expects HBM prices WOULD not impact Micron as much as investors fear.

Is Micron a Good Buy Right Now?

Across Wall Street, Micron’s shares have a Strong Buy consensus recommendation based on 23 Buys and three Holds assigned by 26 Wall Street analysts over the past three months. Moreover, the average MU price target of $190.81 suggests a 20% growth potential from the current level.