Micron tanks after reporting grim outlook

Micron Technology is down more than 12% after-hours on Wednesday after the Idaho-based chipmaker reported weaker-than-expected earnings and a grim forecast for next year.

Micron hit revenue estimates at $8.71 billion and slightly exceeded earnings-per-share projections of $1.76 by $0.03. But that’s the past, and what’s worrisome for investors is the future: the company significantly reduced its outlook for the first quarter of next year amid sluggish demand for the chips it makes, which are used for personal computers and smartphones. Outside of AI, the semiconductor sales are far from booming.

Micron said it expects to report up to $1.53 per share in the first quarter of next year, compared to analysts’ expectation of $1.91. It also said it expects to report revenue of up to $8.1 billion, compared to analysts’ estimate of up to $9.50 billion, according to data compiled by Factset. 

That news spooked investors, sending the stock price down by nearly 20% in the after-hours session. Prior to reporting earnings, Micron ended the trading day up more than 26% this year.

This comes as some of Micron’s peers who are more exposed to the artificial-intelligence market, like Nvidia and Broadcom, are consistently meeting Wall Street’s expectations.