NVDA - Micron Q3 2024 Earnings: Brace For More Turbulence Ahead
2024-06-28 12:32:15 ET
Summary
- Micron Technology, Inc.'s delivery of robust F3Q24 results were overshadowed by a weaker than expected guidance, underscoring limitations to its ability in matching resilient industry growth levels.
- A deeper dive into its revenue drivers during F3Q24 also shows emerging cracks in the durability of Micron's long-term growth trajectory, given extended capacity restraints and intensifying competition.
- With elevated reliance on gradually dampening price tailwinds in the near-term, investors' focus will likely shift towards longer-term considerations, including execution risks on the Idaho and New York greenfield fabs.
Despite the robust showing for F3Q24 , Micron Technology, Inc.’s ( MU ) post-earnings pullback continues to underscore the lack of durability to its valuation premium at current levels as expected. As discussed in our previous coverage , we believe Micron’s valuation upsurge over the past year continues to reflect AI-driven growth expectations that are beyond what the company is capable of delivering. Specifically, we believe Micron’s upsurge over the past year continues to reflect robust industry growth expectations, instead of the company’s actually limited capability in monetizing them. In the following analysis, we will discuss why we believe focus will increasingly shift towards Micron’s management of longer-term risk exposure rather than near-term growth tailwinds coming out of its latest earnings update.
Specifically, Micron’s elevated reliance on ASP expansion in driving revenue growth due to the currently supply constrained environment is a cause for caution, especially given the influx of new capacity for AI-related memory products from competition. And this risk is becoming increasingly evident based on Micron’s F3Q results ....
Micron Q3 2024 Earnings: Brace For More Turbulence Ahead