$Micron Technology (MU.US)$ It was announced to investors that revenue for the second quarter of fiscal year 2024 is expected to decline by 9% quarter-on-quarter.

After reporting quarterly revenue and earnings that met Analyst expectations, the stock price of Light Technology still plummeted by 16.2%, due to its weak forward guidance causing concern among investors. As of the time of writing, Micron Technology fell by more than 2% in pre-market trading, priced at $85.03.

Micron Technology's Earnings Reports have always attracted attention because their release time avoids those of other chip manufacturers, making them the focus. Additionally, Micron is one of the top three memory manufacturers globally, and the only company headquartered in the USA. Memory sales can also reveal changes in the broader Industry ecosystem.

The only growth area in the 2024 Hardware market is the construction of Datacenter equipment for AI infrastructure. This drove Micron's first fiscal quarter revenues up 84% year-on-year and 12% sequentially. Datacenter revenue surged 400% year-on-year and grew 40% sequentially, now accounting for more than half of Micron's total revenue.

Despite investors focusing on Micron's rocket growth in the Datacenter Business, concerns arose from the weakness in the Consumer market. The mobile devices and Internet of Things terminal market saw a 15% decrease sequentially, although it still grew 11% year-on-year. Micron's storage business growth has also stalled.

What truly unsettled investors was Micron's guidance for the second fiscal quarter, which projected a 9% sequential decline in revenue. In the past, such scenarios often meant that stock prices would face pressure.

Cantor Fitzgerald Analyst CJ Muse stated: "The reason investors are interested in Micron — AI Datacenters — is a long-term trend rather than cyclical. However, this time the disappointing performance of more cyclical Businesses such as Smart Phones, PCs, and Autos fell far below expectations."

The Semiconductors Industry is essentially cyclical, and this is particularly evident in the memory sector. Manufacturers experience fluctuations in inventory cycles, leading to significant increases or decreases in sales as prices vary.

Micron warned in its annual report: "Our average selling prices have experienced significant fluctuations and may continue to do so in the future. Over the past five years, the annual changes in average selling prices for DRAM have ranged from single-digit increases to declines of over 40% at their peak."

In the third quarter of fiscal year 2024, Micron's revenue increased by 82% year-on-year; however, it had decreased by 57% in the same period of 2023. Investors had already learned in 2023 that Micron could even experience negative gross margins during downturns.

Investors are paying attention to these sales fluctuations, always waiting for the start of the next cycle. During the current upswing, there are also concerns that it may suddenly end at some point. Many investors have been swept up in abrupt market shifts and do not want to suffer another blow.

Therefore, Micron's disappointing guidance for the second fiscal quarter has caused many investors to choose to exit. Does this mean that Micron's upcycle has come to an end? Currently, it appears that there are two opposing forces in the market.

On one hand, Datacenter spending has reached a historic high, such as.$Amazon (AMZN.US)$、$Microsoft (MSFT.US)$and $Alphabet-C (GOOG.US)$ Such giants indicate that they will not reduce investments quickly, but the growth rate of capital expenditures will slow down; on the other hand, since 2022, there has been weak demand in the Consumer market, and there are no obvious signs of recovery as we head into 2025. Meanwhile, Micron's storage business is also showing signs of potential weakness.

Investors are asking: Is the guidance for the second fiscal quarter a temporary fluctuation, or a deeper signal?

John Vinh from KeyBanc Capital Markets stated: "I believe this is a temporary fluctuation. I think we have a few more quarters of friction, but once we get through this phase, things should start to improve in the second half of 2025."

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Editor/rice