Micron Q1 Earnings Ahead: AI tailwinds expected to drive growth

Semiconductor company Micron Technology (NASDAQ:MU) is set to report its first quarter earnings results on Wednesday, after the closing bell, with the street expecting strong results driven by tailwinds in the company’s high bandwidth memory chips.

Wall Street expects Micron (NASDAQ:MU) to report earnings per share of $1.77, on an 84% rise in revenue to $8.71B.

Analysts at J.P. Morgan, expect the company’s revenue and EPS to land above consensus expectations on better mix adjusted DRAM pricing, overlaid with a recovery in traditional server demand, which should more than offset the sustained weakness across consumer end markets.

However, the analysts believe that second quarter revenue, gross margin, and EPS will be guided below consensus as headwinds in traditional DRAM pricing will likely persist.

“MU shares are down ~35% since peaking in June, which suggests bearish sentiment is somewhat priced in, and we believe the stock should start to outperform in early/1H 2025…,” JPM analysts wrote in a note to clients.

Micron (MU) has a history of beating estimates, having beaten both revenue and EPS estimates 75% of the time in the last two years.

Seeking Alpha analyst Noah Cox of Noah’s Arc Capital Management pointed out that despite market skepticism, Micron’s forward revenue and EPS growth rates exceed sector medians, suggesting shares are undervalued with potential for significant upside.

Micron (MU) has grown more than 28% in market value so far this year, slightly outperforming the broader S&P 500 Index, which has grown 27% YTD.

Analysts have revised their estimates in the upwards direction quite a number of times in the last three months, with EPS estimates seeing 16 upward revisions, and revenue estimates seeing 17.

Micron Technology’s fourth-quarter results topped expectations, but it was the memory maker’s guidance that pleasantly surprised Wall Street. Micron expects revenue for the first-quarter to be between $8.5B and $8.9B, and it expects to earn between $1.66 and $1.82 per share on an adjusted basis.