Micron dips after Edgewater sees softening outlook in 2025

Shares of Micron Technology’s (NASDAQ:MU) and Western Digital (WDC) fell about 5% on Tuesday after Edgewater Research trimmed its NAND and DRAM price forecasts.

The firm sees Micron’s outlook softening further in the first half of 2025.

The analysts said that NAND demand forecasts from Original Equipment Manufacturers, or OEMs, and Cloud Service Providers, or CSPs, continue to compress. Meanwhile, datacenter NAND demand is projected as soft at flat/up slightly year-over-year in 2025. Some CSPs are claiming 2025 is year of optimization, according to the analysts.

The firm said that suppliers noted as pressing customers to sign 2025 LTAs and, in some cases, raise their bit demand forecasts in 2025 LTAs. The suppliers also noted that they are willing to support any/all demand requests for 2025. In addition, concerns over High Bandwidth Memory, or HBM, and Enterprise SSD, or eSSD, shortages appear largely dissipated.

The analysts added that price forecasts have been reduced again across all segments — PC, mobile, server — and for both NAND and DRAM. The PC and mobile OEMs rebalance still targeted to be completed by the second quarter of 2025, and bit orders to align with actual demand growth by the second quarter or second half of 2025.

The firm has a Cautious view in the short term and Mixed view in the long term for the industry.

The analysts said the supply chain feedback suggests there is a disconnect in projections for limited supply growth and tight supply in 2025 versus the industry reality of likely in excess and price pressure through at least the first half of 2025.

Forecasts are turning more cautious for pricing and demand for 2025. The analysts expect feedback to be very fluid in the next several months depending on — enterprise demand; Samsung Electronics’ (OTCPK:SSNLF) HBM success and/or shifts to standard DRAM; speculation around NAND utilization reductions.

For Micron (MU) the firm has a mixed view in the short term and a Positive view in the long term. The analysts added that industry feedback continues to turn more cautious, tempering their Micron optimism for the first half of 2025.

Micron still has company-specific catalysts which can drive outperformance, including HBM and eSSD share gains, according to the analysts.

Feedback on Micron’s relative position in these markets continues to improve in Edgewater’s monthly updates and the analysts expect the gains to be ASP and margin accretive over the next two to three quarters. Long-term, the analysts continue to believe Micron is better positioned in technology transitions, product portfolio (eSSD, HBM), and cost structure/balance sheet.