Micron’s sinking margins spark severe sell-off

Micron’s profitability is a sore spot for investors, even as the chipmaker delivered better-than-expected quarterly sales and profits.

The stock is down 7.4% as of 10:15 a.m. ET, the worst performer in the VanEck Semiconductor ETF.

Adjusted gross margins were below what analysts had penciled in for the three months ending February 27. For the current quarter, management’s outlook for margins of 36.5% (plus or minus 1 percentage point) is also below what Wall Street is looking for.

“Despite record sales from AI tailwinds, Micron’s gross margins remain weak,” wrote Bank of America analyst Vivek Arya, who lowered his 2025 earnings per share estimate on the stock. “Despite continued digestion, we note inventory levels remain elevated in PC/phones amid slower demand, a pressure on pricing (particularly NAND [flash memory chips]).”

The outlook for margin pressure also bedeviled peer Nvidia in the wake of its recent earnings report.