Will Micron Earnings Be Affected By Slump In Semiconductor Sector?

Micron Technology is expected to show a rise in quarterly revenue when it reports results on 26 June for the period ending 31 May 2024. It is expected to report a 77.6% increase in revenue to $6.662 billion from $3.75 billion a year ago,

Micron's guidance on 20 March 2024 for the period ended May 31, was for revenue between $6.40 billion and $6.80 billion. Micron's report will be most closely watched for signs of how robust AI demand remains across its portfolio.

Though technical is showing uptrend for Micron, but from yesterday’s trading, Micron does show that it has some challenges to go higher, having to return the earlier gains, in later session.

MU last reported earnings on 20 March 2024 after the market close (AMC). MU shares gained +14.1% the day following the earnings announcement to close at 109.74. Following its earnings release, 96 days ago, MU stock has drifted +26.7% higher.

From the time it announced earnings, MU traded in a range between 105.72 and 157.54. The last price (139.01) is closer to the higher end of range.

Implied straddle for upcoming earnings is 12.6%. With the semiconductor sector now in a decline, MU earnings need to really surprise the market’s expectations.

What is important is Micro’s outlook guidance for 2024 on how they are going to benefit from the robust AI demand, and with the AI boom going on.

Even though Micron did show some promising trading two trading session ago, but it has retraced and now it is trading around $139.

From the MACD, it looks like there is a downside expected and KDJ is showing signs of a downwards trending, so with the market expectations of a rise in revenue, that might help Micron to gain some ground, but I would think the overall semiconductor sector performance today and tomorrow need to be stable and hopefully in the green.

That would probably help Micron to have a positive price effect before and after its earnings.

If we were to look at how the earnings price move might occur, there might be a -4.70% decline in the price level from the last close at 139.01 based on VaR measure.

We could be looking Micron dropping near $133 price level, but if the earnings were to surprise like what we saw in Q1, we could be looking at a price range of $145 to $150.

Micron earnings came at a time when semiconductor sector have experienced two days of downside trading, I am expecting the sell-offs to subside either today (25 June) or tomorrow (26 June).

If that happen, then we might be able to see performance picked up from the semiconductor sector if Micron earnings beat the expectations and the outlook guidance for 2024 comes up positive and encouraging.

Appreciate if you could share your thoughts in the comment section whether you think Micron earnings move could be affected by semiconductor sector lacklustre performance?

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.