Quick overview
- Micron’s stock rose 6.25% to $733.15 as chip stocks rebounded after a recent selloff.
- The company reported Q4 revenue of $54.2 billion, exceeding expectations and reflecting strong demand for memory chips.
- Micron’s Q1 revenue guidance of $61.5 billion is above analyst forecasts, but concerns about data center spending and political risks persist.
- Investors are monitoring key support and resistance levels, with $690 as support and $744.74 as initial resistance.
Micron (NASDAQ: MU) stock jumped +6.25% yesterday and closed at $733.15. The move came as chip stocks gained some traction after last week’s selloff. The downward pressure was accelerated after worries about slower AI data center spending weighed on the sector.
Q4 Earnings Report Results
Micron has recently reported fiscal Q4 revenue of $54.2 B, which is +379% year over year and above analysts’ expectations of $50.45 B. The revenue results showed that demand for memory chips was still very strong.
Meanwhile, adjusted EPS came in at $33.42, which is above the expected $31.16. At the same time, non-GAAP gross margin reached 87.0%, which reminded that higher sales are turning into very high profits.
Additionally, Core Data Center revenue was $18.00 B against $1.58 B a year ago. Meanwhile, Cloud Memory revenue rose to $16.28 B from $4.54 B. The big difference in values from 2 consecutive years show how high the AI demand is in the market.
At last, full-year FY26 revenue reached $133.19 B, and adjusted free cash flow was $62.31 B. This basically showed that Micron has plenty of cash to fund its expansion.
Q1 Guidance Beats Expectations
In its guidance for next quarter, Micron is anticipating a Q1 revenue of $61.5 B, plus or minus $1.5 B, which is above the Wall Street analysts’ expectations of $56.77 B. Adjusted EPS guidance is $38.15 plus or minus $1.00, a little above the expected $36.02.
However, the company expects non-GAAP gross margin near 86.25%, which is below the 87.0% in Q4. Also, it could add further pressure on price movement if memory prices cool. At the same time, management said it expects an even stronger fiscal 2027, which shows confidence that AI demand will continue.
MU Selloff and Data Center Political Risk
On Thursday, MU fell about -17.5% from $795.23 to $656.39 after Democratic midterm victory raised worries that data center buildouts could slow. If this happens, it will mean fewer data center projects which ultimately means fewer orders for Micron’s memory chips.
On the other hand, 40 of 41 data center ballot measures went against the industry, this shows how serious is the local opposition is, and now this is a real risk for the stock.
Analyst Targets and What to Watch Next
The average Wall Street analyst target for MU is $1,562. Wedbush kept a $1,400 price target, and Bernstein and Citi kept $1,300 targets. On the technical levels, $690 is the major and initial support level for now and the next support level sits at $656. On the upside, $744.74 is the initial resistance level. Any close above $733 could keep a move toward the initial resistance level. However, any close below $690 could drag the prices towards $656.
This week, investors will be watching AI data center spending signals and political headlines for better clarity on MU stock. Micron’s next earnings report is expected to release in late December.
FAQs
Why did Micron stock jump 6.25%?
Micron gained as chip stocks rebounded following last week’s selloff. Its strong Q4 earnings and better-than-expected Q1 guidance also support investor confidence in memory chip demand.
What is Micron’s Q1 revenue guidance?
Micron expects Q1 revenue of $61.5 billion, plus or minus $1.5 billion, above Wall Street’s expectations of $56.77 billion.
Bottom Line
Micron’s strong Q4 results and better-than-expected Q1 guidance show that AI demand continues to support its memory business. However, concerns about data center spending, local political opposition, and potentially lower gross margins remain important risks. Investors will also watch the $690 support and $744.74 resistance levels for the next directional move in MU stock.
Arslan Ali Butt
Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)
Arslan Ali Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.
His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.
His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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