Samsung expects second-quarter profits to more than halve as it struggles to capture AI demand
Written by Emily J. Thompson, Senior Investment Analyst
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Should l Buy MU?
Source: Newsfilter
Samsung's Profit Forecast: Samsung Electronics anticipates a 56% decline in profits for Q2, projecting an operating profit of approximately 4.6 trillion won, significantly lower than analyst estimates of 6.26 trillion won, largely due to struggles in the high-bandwidth memory chip market and competition from SK Hynix and Micron.
Challenges with Nvidia: The company is facing delays in qualifying its advanced high-bandwidth memory chips with Nvidia, which dominates global demand, further impacting its revenue potential as it also contends with weak orders in its foundry business amid fierce competition.
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Analyst Views on MU
Wall Street analysts forecast MU stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for MU is 336.12 USD with a low forecast of 235.00 USD and a high forecast of 500.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
26 Analyst Rating
24 Buy
2 Hold
0 Sell
Strong Buy
Current: 394.690
Low
235.00
Averages
336.12
High
500.00
Current: 394.690
Low
235.00
Averages
336.12
High
500.00
About MU
Micron Technology, Inc. provides memory and storage solutions. The Company delivers a portfolio of high-performance dynamic random-access memory (DRAM), NAND, and NOR memory and storage products through its Micron and Crucial brands. The Company's products enable advancing in artificial intelligence (AI) and compute-intensive applications. Its segments include Compute and Networking Business Unit (CNBU), Mobile Business Unit (MBU), Embedded Business Unit (EBU), and Storage Business Unit (SBU). CNBU segment includes memory products and solutions sold into the data center, PC, graphics, and networking markets. MBU segment includes memory and storage products sold into the smartphone and other mobile-device markets. EBU segment includes memory and storage products and solutions sold into the intelligent edge through the automotive, industrial, and consumer embedded markets. SBU segment includes SSDs and component-level storage solutions sold into the data center, PC, and consumer markets.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Micron Technology Reports Strong Financial Growth Amid AI Investment Surge
- Significant Financial Improvement: Micron Technology's revenue has nearly tripled over the past 12 months compared to fiscal 2023, with net income reaching $11.9 billion, indicating a robust recovery amid surging AI hardware demand and suggesting substantial future growth potential.
- Optimistic Market Outlook: Micron expects the total addressable memory market to grow from $35 billion in 2025 to $100 billion by 2028, reinforcing the company's leadership position in the memory sector and potentially leading to increased market share and profits.
- Improved Supply-Demand Dynamics: Micron has secured agreements with customers for pricing and volume terms for high-bandwidth memory through 2026, ensuring a stable revenue stream for the coming years, which will help the company maintain its competitive edge in a challenging market.
- Increased Investor Confidence: Despite significant stock price increases, Micron's strong financial data and market outlook instill confidence in investors regarding the company's future growth, likely attracting more capital inflows.
See More
Micron Stock Volatility Analysis and Future Outlook
- Stock Fluctuation: Micron's stock dropped 6% on Monday morning before recovering to a 1.8% loss by 12:55 p.m. ET, reflecting market uncertainty about its future performance, especially against TD Cowen's prediction of a 55% price surge to $600.
- Earnings Forecast Upgrade: TD Cowen raised Micron's 2023 earnings per share forecast from $50 to $60, implying a potential stock price of $600 based on a 10x forward P/E ratio, indicating analysts' optimism about Micron's profitability.
- DRAM Market Dynamics: Despite TD Cowen's positive outlook, market analysis suggests that DRAM supplies will remain tight for multiple years, which could drive up prices for computer memory products and impact Micron's earnings potential.
- Competitive Risks: The primary reason for Micron's stock decline is the impending large-scale production of next-generation high-bandwidth memory chips by competitor Samsung, raising concerns that increased supply could undermine TD Cowen's expectations for Micron's profitability and stock price growth.
See More
TD Cowen Predicts Micron Stock Will Reach $600
- Earnings Upgrade: TD Cowen has raised its earnings forecast for Micron from $50 to $60 per share, implying a potential stock price of $600 based on a 10-times forward earnings multiple, indicating an enhanced outlook for the company's profitability.
- Tight DRAM Market: The DRAM supply is expected to remain tight for multiple years, which will likely drive up prices for computer memory products, thereby supporting Micron's profit growth, although analysts caution that earnings may not consistently reach $60 annually.
- Increased Competitive Threat: According to Barron's, the primary reason for Micron's stock decline is Samsung's imminent large-scale production of the next generation of high-bandwidth memory chips, which could increase market supply and undermine TD Cowen's expectations for rising DRAM prices.
- Cautious Market Sentiment: Despite TD Cowen's optimistic long-term outlook for Micron, concerns about cyclical fluctuations in the semiconductor industry persist, prompting investors to exercise caution when considering Micron stock, especially in light of intensifying competition.
See More
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- Key Holdings Contribution: Among the ETF's top ten holdings, Micron Technology led with a 45.4% stock price increase in January, primarily driven by strong demand for memory chips, which boosted the overall ETF performance.
- Strong Earnings Expectations: Nvidia, the ETF's largest holding at 18.3%, is set to report earnings on February 25, with management guiding for quarterly revenue of $65 billion, a 65% year-over-year growth, which could serve as a significant catalyst for future ETF performance.
- Exceptional Long-Term Returns: As of February 6, the VanEck Semiconductor ETF has delivered a 62.2% return over the past year, quadrupling the S&P 500's 15.4% return, underscoring its investment value in the AI and semiconductor sectors.
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- Strong January Performance: The VanEck Semiconductor ETF gained 12% in January, significantly outperforming the S&P 500's 1.5% increase, indicating a robust recovery in the semiconductor sector and heightened investor confidence.
- Key Holdings Contribution: Among its top ten holdings, Micron Technology's stock surged 45.4% in January, driving overall performance and reflecting strong demand for memory chips, particularly in artificial intelligence applications.
- Future Earnings Expectations: Nvidia, the ETF's largest holding, is expected to report a 65% year-over-year growth in its upcoming earnings on February 25, and if results meet expectations, it could further boost the ETF's performance and attract more investor interest.
- Outstanding Long-Term Returns: As of February 6, the VanEck Semiconductor ETF has delivered a 62.2% return over the past year, quadrupling the S&P 500's performance, showcasing its strong performance and competitive edge in long-term investments.
See More
Global Memory Market Tightens Further
- Tightening Supply/Demand: Goldman Sachs analysts highlight that DRAM, NAND, and high-bandwidth memory are entering the tightest supply-demand landscape in over a decade, with a projected 4.9% DRAM undersupply in 2026, significantly above prior forecasts, indicating robust market demand for memory.
- Surge in Server Memory Demand: With strong deployments in AI servers and data centers, server-related memory is expected to account for over 50% of total DRAM demand in 2026 and 2027, driving rapid growth in the memory market, while demand from personal computers and smartphones is slowing.
- Price Surge Expectations: Goldman anticipates conventional DRAM prices to rise by 176% year-over-year in 2026, with operating margins reaching 70%-80%, near record levels, while NAND prices are expected to increase by 100%-120%, indicating a significant boost in profitability for memory producers.
- Positive Company Outlook: Goldman favors SK Hynix and SanDisk, expecting SK Hynix to achieve unprecedented operating margins, while SanDisk is set for upward earnings revisions due to accelerating enterprise demand, with a target price of $700, implying a 20% upside potential.
See More
Micron Technology Reports Strong Financial Growth Amid AI Investment Surge
- Significant Financial Improvement: Micron Technology's revenue has nearly tripled over the past 12 months compared to fiscal 2023, with net income reaching $11.9 billion, indicating a robust recovery amid surging AI hardware demand and suggesting substantial future growth potential.
- Optimistic Market Outlook: Micron expects the total addressable memory market to grow from $35 billion in 2025 to $100 billion by 2028, reinforcing the company's leadership position in the memory sector and potentially leading to increased market share and profits.
- Improved Supply-Demand Dynamics: Micron has secured agreements with customers for pricing and volume terms for high-bandwidth memory through 2026, ensuring a stable revenue stream for the coming years, which will help the company maintain its competitive edge in a challenging market.
- Increased Investor Confidence: Despite significant stock price increases, Micron's strong financial data and market outlook instill confidence in investors regarding the company's future growth, likely attracting more capital inflows.
See More
Micron Stock Volatility Analysis and Future Outlook
- Stock Fluctuation: Micron's stock dropped 6% on Monday morning before recovering to a 1.8% loss by 12:55 p.m. ET, reflecting market uncertainty about its future performance, especially against TD Cowen's prediction of a 55% price surge to $600.
- Earnings Forecast Upgrade: TD Cowen raised Micron's 2023 earnings per share forecast from $50 to $60, implying a potential stock price of $600 based on a 10x forward P/E ratio, indicating analysts' optimism about Micron's profitability.
- DRAM Market Dynamics: Despite TD Cowen's positive outlook, market analysis suggests that DRAM supplies will remain tight for multiple years, which could drive up prices for computer memory products and impact Micron's earnings potential.
- Competitive Risks: The primary reason for Micron's stock decline is the impending large-scale production of next-generation high-bandwidth memory chips by competitor Samsung, raising concerns that increased supply could undermine TD Cowen's expectations for Micron's profitability and stock price growth.
See More
TD Cowen Predicts Micron Stock Will Reach $600
- Earnings Upgrade: TD Cowen has raised its earnings forecast for Micron from $50 to $60 per share, implying a potential stock price of $600 based on a 10-times forward earnings multiple, indicating an enhanced outlook for the company's profitability.
- Tight DRAM Market: The DRAM supply is expected to remain tight for multiple years, which will likely drive up prices for computer memory products, thereby supporting Micron's profit growth, although analysts caution that earnings may not consistently reach $60 annually.
- Increased Competitive Threat: According to Barron's, the primary reason for Micron's stock decline is Samsung's imminent large-scale production of the next generation of high-bandwidth memory chips, which could increase market supply and undermine TD Cowen's expectations for rising DRAM prices.
- Cautious Market Sentiment: Despite TD Cowen's optimistic long-term outlook for Micron, concerns about cyclical fluctuations in the semiconductor industry persist, prompting investors to exercise caution when considering Micron stock, especially in light of intensifying competition.
See More
VanEck Semiconductor ETF Gains 12% in January
- Strong January Performance: The VanEck Semiconductor ETF surged 12% in January, significantly outperforming the S&P 500's 1.5% increase, indicating a robust recovery in the semiconductor sector and heightened investor confidence.
- Key Holdings Contribution: Among the ETF's top ten holdings, Micron Technology led with a 45.4% stock price increase in January, primarily driven by strong demand for memory chips, which boosted the overall ETF performance.
- Strong Earnings Expectations: Nvidia, the ETF's largest holding at 18.3%, is set to report earnings on February 25, with management guiding for quarterly revenue of $65 billion, a 65% year-over-year growth, which could serve as a significant catalyst for future ETF performance.
- Exceptional Long-Term Returns: As of February 6, the VanEck Semiconductor ETF has delivered a 62.2% return over the past year, quadrupling the S&P 500's 15.4% return, underscoring its investment value in the AI and semiconductor sectors.
See More
VanEck Semiconductor ETF Gains 12% in January
- Strong January Performance: The VanEck Semiconductor ETF gained 12% in January, significantly outperforming the S&P 500's 1.5% increase, indicating a robust recovery in the semiconductor sector and heightened investor confidence.
- Key Holdings Contribution: Among its top ten holdings, Micron Technology's stock surged 45.4% in January, driving overall performance and reflecting strong demand for memory chips, particularly in artificial intelligence applications.
- Future Earnings Expectations: Nvidia, the ETF's largest holding, is expected to report a 65% year-over-year growth in its upcoming earnings on February 25, and if results meet expectations, it could further boost the ETF's performance and attract more investor interest.
- Outstanding Long-Term Returns: As of February 6, the VanEck Semiconductor ETF has delivered a 62.2% return over the past year, quadrupling the S&P 500's performance, showcasing its strong performance and competitive edge in long-term investments.
See More
Global Memory Market Tightens Further
- Tightening Supply/Demand: Goldman Sachs analysts highlight that DRAM, NAND, and high-bandwidth memory are entering the tightest supply-demand landscape in over a decade, with a projected 4.9% DRAM undersupply in 2026, significantly above prior forecasts, indicating robust market demand for memory.
- Surge in Server Memory Demand: With strong deployments in AI servers and data centers, server-related memory is expected to account for over 50% of total DRAM demand in 2026 and 2027, driving rapid growth in the memory market, while demand from personal computers and smartphones is slowing.
- Price Surge Expectations: Goldman anticipates conventional DRAM prices to rise by 176% year-over-year in 2026, with operating margins reaching 70%-80%, near record levels, while NAND prices are expected to increase by 100%-120%, indicating a significant boost in profitability for memory producers.
- Positive Company Outlook: Goldman favors SK Hynix and SanDisk, expecting SK Hynix to achieve unprecedented operating margins, while SanDisk is set for upward earnings revisions due to accelerating enterprise demand, with a target price of $700, implying a 20% upside potential.
See More
