Micron Technology Inc (NASDAQ:MU) stock plunges 15.52% (As on December 19, 11:37:56 AM UTC-4, Source: Google Finance) after the company issued weak second-quarter guidance despite an earnings beat for the latest period. This is due to weak demand for consumer-centric products such as personal computers and smartphones impacts the chipmaker’s business. The market for dynamic random-access memory (DRAM) chips, which account for most of Micron’s revenue, remains sluggish. Demand for smartphones has remained weak and shipments for them are likely to increase in the second half of Micron’s fiscal year ending August 2025. Global PC shipments reached 62.9 million units in the third quarter of 2024, marking a 1.3% decline from the previous year, according to research firm Gartner. The data center revenue surpassed 50% of the total revenue for the first time. While consumer-oriented markets are weaker in the near term, the company anticipates a return to growth in the second half of the fiscal year.

Further, Micron’s high-bandwidth memory (HBM) chips, a type of DRAMs, have experienced strong demand due to their use in artificial intelligence. Revenue from HBM more than doubled sequentially, becoming a key driver for the company. The company, one of only three providers of HBM chips alongside South Korea’s SK Hynix and Samsung, is now focusing on increasing its production of HBM chip

MU in the first quarter of FY 25 has reported the adjusted earnings per share of $1.79, beating the analysts’ estimates for the adjusted earnings per share of $1.75, according to analysts’ expectations surveyed by LSEG. The company had reported the adjusted revenue growth of 84 percent to $8.71 billion in the first quarter of FY 25, which is inline with the analysts’ estimates for revenue of $8.71 billion.

Additionally, Investments in capital expenditures, net were $3.13 billion for the first quarter of 2025, which resulted in adjusted free cash flows of $112 million for the first quarter of 2025. Micron ended the quarter with cash, marketable investments, and restricted cash of $8.75 billion. The company has declared a quarterly dividend of $0.115 per share, payable in cash on January 15, 2025, to shareholders of record as of the close of business on December 30, 2024.

For the second quarter, Micron expects revenue to be of $7.9 billion, plus or minus $200 million, and adjusted earnings per share of $1.43, plus or minus 10 cents. Analysts were expecting revenue of $8.98 billion and EPS of $1.91, according to LSEG. The company expects low-single-digit percentage growth for smartphones in 2025, consistent with its prior expectations.