Semiconductors
Micron FQ1 Earnings Preview: Look for a Focus on Profitability and Pricing Power
Micron will release its Q1 FY2025 results on Dec 18. Analysts expect revenue to grow 84.3% YoY to $8.71 billion. The adjusted EPS is expected to come in at $1.77, compared to (-$0.95) in the same period last year and a solid 50% sequential growth from $1.18 in FQ4. The AI-related portion of its revenue will not only ramp in FY2025, but it’s also accretive to margins. Management guided for margins to improve sequentially due to better pricing and portfolio mix. Last week, there was an important announcement that stated Samsung is unable to supply HBM3e to Nvidia in 2024. This is a major positive for Micron, who along with SK Hynix, is a key supplier for HBM3e. With Samsung unable to supply HBM3e, this could help to increase Micron’s pricing power on what limited supply there is available. We expect the earnings call to focus on this news as analysts will want to figure out how to update their estimates based on the recent announcement that memory-behemoth Samsung is out of the picture for now.
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