Shares of Micron Technology, a memory-chip company, dropped by 4.9% in premarket trading after its fourth-quarter earnings report on Wednesday. The company’s margin outlook surprised the market, but UBS analyst Timothy Arcuri believes that investors should still bet on the stock. While Micron’s guidance may have fallen short of expectations, Arcuri is optimistic about the future, stating that the upturn in demand, pricing, and profitability is already underway. He predicts that 2025 will be a record year for memory-industry revenue and maintains a Buy rating on the stock with a target price of $76.
Micron has faced challenges due to lower demand for its DRAM and NAND chips in its core end markets of PCs, mobile phones, and data centers. However, Arcuri notes that the company’s guidance suggests that almost all of its revenue growth for the current quarter will come from DRAM sales. He also points out that customers are already making strategic purchases, as they anticipate potential price increases by 2025. Despite the current drop in stock value, Arcuri remains optimistic about Micron’s future prospects.
In summary, while Micron Technology’s margin outlook surprised the market and caused a drop in stock value, UBS analyst Timothy Arcuri believes that investors should still consider betting on the stock. He sees positive signs of an upturn in demand, pricing, and profitability in the memory-chip industry, and predicts that 2025 will be a record year for revenue. Though Micron has faced challenges in its core markets, Arcuri suggests that strategic purchases and potential price increases in the future indicate a promising outlook for the company.