After Tanking 40%, Micron Just Got Hit with a Brutal "Double Whammy"

Micron Technology’s CEO is probably wishing he’d pulled the covers over his head and called in sick today. Turns out, not one, but TWO major Wall Street analysts decided to play judge, jury, and executioner on the stock at the same time. 

Getting downgraded once is bad enough—but twice in one day is horrible. It takes me back to the time I bombed both my chemistry and geometry tests back to back. That was the moment my parents officially gave up on the whole “doctor” dream. And if Micron’s stock had parents, they’d probably be feeling the same way right now.

Micron was a top chipmaker back in June, but now? It looks like Wall Street completely out on the Boise, Idaho-based company. The stock has tanked over 40%, wiping out more than $70 billion in market value. 

And just when investors thought it couldn’t get worse, Karl Ackerman from Exane BNP Paribas decided to pour salt on the wound. He downgraded the stock from “outperform” to “underperform” and lowered the price target from $140 to $67.

Ackerman’s big worry? Micron’s time in the AI-memory-chip spotlight might be shorter than anyone expected. He’s concerned about a glut of high-bandwidth memory chips, which could cause prices for Micron’s DRAM chips to drop faster than you can say “overstocked.” He’s also predicting Micron’s 2025 and 2026 earnings will be 34% and 45% lower than what other analysts are hoping for.

Not everyone’s sounding the alarm just yet. Srini Pajjuri over at Raymond James also gave Micron a downgrade, but he wasn’t exactly pulling the fire alarm. Sure, he lowered the price target from $160 to $125, but he’s still holding out hope for Micron’s DRAM business. In his eyes, it’s got enough staying power to ride out this rough stretch.

So, why is Micron in such a tough spot? It’s a combination of bad timing, sky-high expectations, and as sad as it is to admit, the AI hype is cooling off. Investors had been flocking to anything AI-related, but now that excitement is fading, Micron is feeling the pressure. On top of that, they’re planning to increase capital spending by 70% to hit $13.5 billion in fiscal 2025—a big number that’s adding to investor concerns. Losing market share to giants like NVIDIA isn’t helping matters either.

Despite all this, Microns got big plans to capitalize on AI with their HBM3E chips, which are already being used in Nvidia's H200 processors. The company is projecting “multiple billions of dollars” in revenue from these AI-driven products next year, which sounds great on paper. But until those numbers start rolling in, Micron has some work to do.

CEO Sanjay Mehrotra is optimistic, talking about how AI will transform everything from smartphones to smart cars. But for now, investors need more than a bright future—they need results. Some analysts believe the worst is already behind the stock, while others are more cautious.

(Source: CNBC)

It’s not 2023 anymore, and the AI hype isn’t enough to bail everyone out. Micron’s looking at a massive 70% spending hike to hit $13.5 billion by 2025, while its stock has tanked over 40%. At this point, hope alone won’t cut it. You can bet Micron’s probably burning up the phones, calling every Wall Street analyst they can find to drum up some good press. Of course, I’m joking, but things are looking bleak.

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