Micron's Stock Drops 8% as Margin Forecasts Miss Estimates

Micron Technology's Q2 earnings call highlighted strong revenue performance in the DRAM sector, particularly driven by data centers, with DRAM revenue increasing 47% year-over-year to $8.1 billion. However, the company is grappling with challenges in the NAND market, which negatively impacted its gross margins, leading to an 8% drop in stock price following a forecast of lower-than-expected profit margins. Micron's gross margins were reported at 37.9%, missing analyst expectations, and future margins are projected to be around 36.5%. Nonetheless, demand for high-bandwidth memory (HBM) surged, with quarterly sales exceeding $1 billion for the first time, indicating a strong position in the AI market. The company is also investing in future capabilities, including new facilities in Singapore and Idaho. Despite the hurdles, Micron anticipates record revenues in the upcoming quarter, fueled by AI-related demand.