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Micron Technology Inc (Nasdaq: MU) is pushing to the downside in extended hours on Wednesday even though it reported market-beating financial results for its third quarter. 

Shares of the memory chip maker are still up about 60% for the year.  

Micron stock sinks on guidance

Micron stock is losing at writing primarily because its management issued only in-line guidance for the future. MU now expects its revenue to print at $7.60 billion in Q4. 

Analysts, in comparison, were at $7.59 billion. Sanjay Mehrotra – the chief executive of Micron Technology said in a press release today:

We are gaining share in high-margin products like High Bandwidth Memory (HBM), and our data center SSD revenue hit a record high, demonstrating the strength of our AI product portfolio across DRAM and NAND.

The Nasdaq listed firm improved its gross margin by 910 basis points to 26.9% in the second quarter. Note that Micron stock does also pay a dividend.

Micron Q3 earnings snapshot

• Earned $332 million that translates to 30 cents per share
• Had $793 million loss (71 cents per share) last year
• Adjusted EPS printed at 62 cents as per the earnings report
• Revenue increased 17% year-over-year to $6.81 billion
• Consensus was 30 cents a share on $6.7 billion in revenue

Micron saw operating cash flow come in at $2.48 billion for its fiscal Q2 – up sharply from $24 million a year ago. CEO Mehrotra also said on Wednesday.

Robust AI demand and strong execution enabled Micron to drive 17% sequential revenue growth, exceeding our guidance range in fiscal Q3

Are Micron shares worth an investment?

At $1.11 billion, operating expenses remained roughly the same as last year for Micron Technology in the third quarter.

Ahead of its earnings release, analysts at CFRA Research reiterated their “buy” rating on Micron stock. Their $170 price target suggests about a 30% upside from here. CFRA analysts wrote in their recent research note:

HBM may represent over 20% of MU’s DRAM revenue in CY 25 (currently single-digits), as it expands customer offerings (e.g., from H200 to Blackwell to Rubin) that require greater memory/bandwidth needs. This should drive wider gross margins (potentially +50% by end-CY 25 vs. 20% in Feb-Q) and multiple expansion as MU’s revenue shifts toward higher value offerings.

An even bullish stance on Micron stock came from Wolfe Research ahead of its quarterly report on Wednesday. Analysts at that investment firm see an even more upside in MU to $200 that translates to about a 50% upside from here.

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