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Chipmaker Micron Technology (MU) beat its fiscal second quarter earnings estimates, posting revenue of $8.05 billion (vs. estimates of $7.91 billion) and adjusted earnings per share of $1.56 (vs. estimates of $1.43 per share).
CFRA Research senior equity analyst Angelo Zino sits down with Julie Hyman and Josh Schafer on Market Domination Overtime to talk more about the tech company's quarterly figures and its position in the AI semiconductor and high bandwidth memory chip landscapes.
To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime here.
Joining us now with a closer look at Micron's results, CFRA research senior equity analyst, Angelo Zino. Angelo, uh, what do you think of these results here? Looks like it's a, it's a pretty decent beat across the board.
Yeah, so thanks for having me. Overall, yeah, you're right. It was a pretty decent beat, beat across the board. We were looking for about a 9% sequential decline, uh, from the company and I think it was about a 7 and a half sequential decline. Still implying year over year growth of about 38% or so. And clearly you kind of, you guys kind of alluded to the, the, the beat on the EPS side and the guidance also kind of slightly above expectations. And we're not necessarily surprised that the weakness kind of going into the quarter and why the stock actually underperformed relative to a lot of names in the second half of last year was because of some of the, the weakness on the consumer side of things. But the bigger story for Micron is obviously kind of the AI tilt tied to them. And you're going to see that business really kind of ramp up here through wrap calendar 25 and even become a bigger piece of that business in 26 and 27. So I think, you know, the, the stock as of late, at least, you know, year to date has been performing, um, you know, notably better than a number of the other semi names out there. And I think rightfully so because you've got a really nice secular story here, tied to what you guys almost kind of alluded to in terms of the memory space, a very commoditized area of the market. But as you kind of shift towards these higher value offerings out there, I think you've got a really good story, uh, you know, heating up here for Micron.
So, Angel, Julian and I were just talking about this. Where do you feel like we're at with the AI story for Micron? Is it still early innings, I guess, as we like to say, right? And growing in that stage, or are we a little bit further along?
I think for Micron specifically relative to a lot of other names out there, they were actually a little bit late to the game when it comes to, to high bandwidth memory and kind of getting in there. And so, you know, we think they're, it's still early innings for them when you kind of look at high bandwidth memory. I think in the press release, uh, they, they just alluded to the fact that they just surpassed about a billion in revenue. I think that's about, you know, 12 or so percent of their revenue. So just over 10% of their revenue. When you kind of look at the trajectory and the roadmap that, um, Jensen Wong just provided at, uh, at GTC this week in terms of Blackwell Ultra and Ruben, and then more importantly, going down to Ruben Ultra kind of, you know, providing three iterations out there moving towards high bandwidth memory for next year, the upside we think is going to be, um, significantly higher. You're talking about billions in terms of revenue for high bandwidth this year and even, you know, much larger going into 27 and 28. So we think early innings, um, at least for Micron specifically. And again, the, the important part here is high bandw, high bandwidth memory is not commoditized yet. It's not kind of being massively produced by the Chinese out there. The ASPs are very favorable in nature. So they're going to continue to get a benefit not only on the volume on high bandwidth memory, but overall average selling prices will continue to improve.
