Micron stock pops on earnings beat, Q3 guidance

Micron Technology (MU) reported better-than-expected fiscal second quarter results on Wednesday after the market close. The company reported adjusted earnings per share of $0.42. Analysts had been expecting a $0.24 loss. Adjusted revenue of $5.82 billion topped estimates of $5.35 billion.

It was the forecast for the third quarter that sent shares soaring, however. Micron expects adjusted revenue in a range of $6.4-$6.8 billion versus a $5.99 billion estimate and adjusted earnings per share of $0.38-$0.52 compared to estimates of $0.24.

Yahoo Finance's Seana Smith and Brad Smith discuss some of the analyst reactions to the report.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Stephanie Mikulich.

Video Transcript

- Our stock to watch today is Micron. It's the number one trending ticker on Yahoo Finance's site Premarket. Shares of the chip manufacturer skyrocketing after beating on the top and bottom line in the company's second quarter. Micron posting better than expected, guidance for the third quarter driven by demand for-- you guessed it, AI hardware here.

And so as you're taking a look at the actuals versus the estimates, it was expected that this company would report a loss. They did not. They reported a gain. In fact, adjusted EPS coming in at $0.42 when the Street was looking for a loss of about $0.24 a share, and then revenue clearly beating on expectations as well here.

You've got a host, a dozen, actually, firms that raise their price target after this bang up report here for Micron, which looked at some of the AI demand driven components for their business as well [? accelerating. ?]

- Certainly. We will be speaking with one of the analysts who did up his price target from TD Cowen later on in the show, just getting his thoughts on this recent results here from Micron. But once again, this reaffirms the fact that at least for semiconductors right now, many of those chip makers, they seem to be on this road to recovery. They are starting to see demand. They are starting to get a better hold of those inventory levels.

Now the plan here from Micron, to boost CapEx in fiscal year 2025, that's helping some of the competitors out there. I mean, we are seeing an upward upside reaction from Applied Materials, from Lam Research. That's helping to reassure the street at this point as well. You mentioned the fact that so many of these analysts raised their price targets on the stock.

Some quick reaction here. KeyBanc saying that the pricing uptrend and also normalizing business operations is expected to sustain that margin recovery story into fiscal year 2025. And also, Morgan Stanley saying that it was a good quarter from Micron, but the bigger surprise was management's continued visibility and enthusiasm.

So pointing to that recovery, pointing to the fact that they expect to see the increase of demand carry into the new fiscal year, what that could do for the stock. A lot of analysts, at least right now, making the argument that they still see room to run to the upside.

- Yeah. And expecting on top of that being able to put more price into the market. They expect DRAM and NAND pricing levels to increase further throughout the calendar year 2024 and expect record revenue and much improved profitability now in the fiscal year of 2025 because of the demand combined with the pricing that they can put out there to many of those customers.

And I was looking for a reason to talk about nodes again this week, which I got more of a definition from one of our viewers, who actually tagged us and responded after we had our amazing conversation earlier this week trying to break down node demand and how it refers to the minimum transistor geometry there. So we'll go further in on another day.

- I was going to say, you're going to have to break that down a little bit more.