Tech giant Micron predicted a growth spike - is it time to invest in their stocks?
Micron Technology's Stock Surges on Positive Q4 Fiscal 2025 Outlook
Micron Technology's stock is experiencing a notable growth of over three percent in U.S. trading, following a positive outlook for its Q4 fiscal 2025 performance. The tech company has revised its earnings guidance, projecting stronger-than-expected results.
The updated guidance includes a significant upward revision of the quarterly revenue from $10.7 billion ± $300 million to $11.2 billion ± $100 million. Non-GAAP gross margins are expected to increase from 42.0% ± 1.0% to 44.5% ± 0.5%, and non-GAAP EPS from $2.50 ± $0.15 to $2.85 ± $0.07.
This optimistic revision indicates robust demand conditions and improved profitability for Micron in the near term. The upgrade reflects improved pricing, particularly in DRAM, and strong operational execution.
Micron attributes the higher targets to strong demand for its memory chips used in AI infrastructure. The company's previous guidance for unadjusted earnings was $2.14 to $2.44 per share, for quarterly revenue - $10.4 to $11.0 billion, and for adjusted earnings - $2.35 to $2.65 per share.
The boost for Micron's stock is due to an upgrade in earnings guidance. Sumit Sadana, Chief Business Officer of Micron, stated that "price trends in all our markets are robust, and we've had great success in raising those prices."
If the stock breaks above its July high of $129.85, it would be a positive signal and open the way towards its all-time high of $157.54, reached last year. Currently, Micron stock is trading at $122.41, up three percent on Monday.
Semiconductor companies like Micron are seeing increased demand for High Bandwidth Memory (HBM) chips. The increased demand for HBM chips is due to large tech companies expanding their investments in AI data centers.
Micron Technology now expects its adjusted earnings to be between $2.78 and $2.92 per share. The company has significantly revised its outlook for the fourth quarter, now expecting quarterly revenue to be between $11.1 and $11.3 billion. Micron Technology's previous estimate for gross margin was 41.0 to 43.0 percent, but the company expects its gross margin to improve, with a target of 44.0 to 45.0 percent.
Micron Technology is among the top performers in the Nasdaq 100 on Monday and among the top five performers in the Nasdaq 100 today. Investors often interpret such upward guidance changes as a positive signal for stock performance.
In light of Micron Technology's optimistic Q4 fiscal 2025 outlook, investors are now viewing the financial sector favorably, particularly in regards to technology companies that invest in advanced memory solutions like Micron. The company's significant revision in earnings guidance, with non-GAAP EPS expected to range from $2.78 to $2.92 per share and an estimated quarterly revenue between $11.1 and $11.3 billion, has triggered a surge in Micron's stock price.
