TLDR
- Micron (MU) stock fell about 4% on Thursday after Samsung’s quarterly profit missed estimates.
- Samsung posted Q4 net profit of 75.136 trillion won, below the 86.13 trillion won consensus, despite a fourth straight record quarter.
- SanDisk (SNDK) and SK Hynix also fell as the selloff spread across memory stocks.
- Citi’s Atif Malik kept a $1,300 price target on Micron after its record $35.2 billion buyback authorization.
- Micron can start major buybacks from Dec. 9, and UBS estimates it could repurchase up to $200 billion a year.
Micron Technology (MU) stock slid about 4% on Thursday, trading down roughly 3.6% in the latest session. The drop followed weaker results from rival Samsung Electronics. Earlier in the day, Micron was down 2.6% in premarket trading.
Samsung reported fourth-quarter net profit of 75.136 trillion won. That missed the FactSet consensus of 86.13 trillion won. It was still the company’s fourth straight quarter of record earnings.
Revenue more than doubled from a year ago to a record 195.253 trillion won. Operating profit rose nearly ninefold to 107.441 trillion won.
The chip-making division led the way. It posted a record operating profit of about 106.5 trillion won, which made up most of the company’s total operating income.
Samsung stock still fell more than 4% in Seoul. Investors had high hopes going in, and some worry about AI infrastructure spending. A lack of detail on shareholder returns also weighed on the stock.
Memory Peers Follow Samsung Lower
The selloff did not stop in Seoul. SanDisk (SNDK) and SK Hynix fell 2.6% and 1.9% in U.S. premarket trading. By midday, SanDisk was down about 3% and SK Hynix’s U.S. listing was off about 1%.
A record quarter did not save Samsung’s stock, which says a lot about how much the market already expects. A miss against a very high bar was enough to send the group lower.
Samsung did not change its outlook. The company said tight memory supply should continue for the next few years, which keeps chip prices elevated.
It expects strong earnings from AI chip demand to run through next year. Sales of its higher-end HBM4 products are also expected to rise.
Samsung said multiyear supply contracts should cover 60% to 70% of its projected production capacity by 2030. That is a long runway of locked-in demand.
The company also laid out its spending plans. Capital expenditure is expected to reach 84.4 trillion won in 2026, including 76.8 trillion won for the semiconductor division.
Analysts Stay Upbeat on Micron
Not everyone is rattled by the dip. Citi analyst Atif Malik reiterated a price target of $1,300 on Micron.
Malik pointed to the company’s record $35.2 billion share repurchase program. He wrote on Thursday that it positions Micron “to materially increase shareholder returns.”
He also said the authorization shows management’s confidence in steady free cash flow. In his view, DRAM supply and demand should stay tight through 2027-28.
The real test for Micron comes when it can start major stock buybacks. That begins Dec. 9, under the terms of its 2024 U.S. Chips Act funding.
UBS analyst Timothy Arcuri has estimated Micron could buy back shares at a rate of up to $200 billion a year. UBS stock was up 3.36% on Thursday.
For now, Micron trades lower alongside its peers, with the Dec. 9 buyback start date the next date on the calendar.
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