Bulls vs. Bears: Is Micron a Buy after earnings-led selloff

Shares of Micron Technology (NASDAQ:MU) fell 12% this week after the memory producer projected an underwhelming outlook for Q2 FY25 on Wednesday, despite reporting better-than-expected Q1 financials.

While Micron (NASDAQ:MU) CEO Sanjay Mehrotra predicted a return to growth in H2 FY25, several Seeking Alpha authors downgraded the Boise, Idaho-based tech firm, even though others renewed their bullish bets.

The Bulls

“Micron Technology’s 16% stock drop post-Q2 guidance miss is driven by weaker NAND and mobile orders, not AI-related issues,” wrote SA analyst Noah’s Arc Capital Management in “Micron Q1 Review: Strong AI Demand Means I’m Still Bullish (Rating Upgrade).” “The company’s forward P/E ratio is significantly below the sector median, presenting a unique buying opportunity with a 108% upside potential.”

“We think the slower end demand rebound and industry oversupply are now priced into the stock and outlook, resetting expectations and making MU better positioned to outperform,” argued SA Investing Group Leader Tech Stock Pros in “Micron Stock: The Sell-Off We’ve Been Waiting For – Upgrading To Strong Buy.” “We see attractive entry points in MU stock at current levels for the mid-to-long-term investor.”

“The positives in Micron’s Q1 ’25 earnings scorecard still exceeded the negatives, in my opinion,” added SA analyst The Asian Investor in “Micron: Why I Am Aggressively Buying The Drop.” “Micron’s valuation draw-down presents an attractive investment opportunity, especially given the expected HBM shipment ramp into FY 2026.”

“This quarter was an obvious setback as perhaps weak consumer demand was underestimated in the revenue mix as AI grabbed all the headlines,” noted SA analyst Kumquat Research in “Micron Earnings: Down But Not Out, Why I’m Doubling Down.” “Despite the ongoing selloff, I think Micron shares currently represent an extremely valuable risk-reward profile.”

The Bears

“Technically relative to the S&P500, MU is en-route downwards toward the 4-monthly support level, which implies scope for further underperformance,” added Hunting Alpha in “Micron Q1: Riddled With A Challenging Outlook (Rating Downgrade).” “I expect a valuation multiple de-rating to follow almost unanimous downgrades in EPS, revenue and gross margins over the next 4 quarters.”

“Going forward, we expect the company to continue to struggle to actually earn FCF and generate shareholder returns,” argued SA Investing Group Leader The Value Portfolio in “Micron’s Poor Performance Is Not Surprising (Rating Downgrade).” “That makes the company a poor investment for the long term.”

“Management’s eq2’25 revenue guidance is $1b below consensus estimates of $8.9b, suggesting that growth may be tapering off as a result of capped capacity,” opined Michael Del Monte in “Micron’s Growth Is Limited By Sold Out HBM (Rating Downgrade).” “Given the macroeconomic risk factors relating Micron’s consumer markets and the limited upside potential for HBM, I am downgrading my rating to a HOLD.”