Why is Micron Technology, Inc. stock outperforming the market?

Micron Technology, Inc. reported mixed financial results for the first quarter of fiscal year 2025, with revenue of $8.71 billion, slightly below the consensus estimate of $8.72 billion, but significantly up from $4.73 billion the previous year. The company exceeded expectations with an adjusted earnings per share (EPS) of $1.79 against the anticipated $1.76. However, Micron's guidance for the second quarter was weaker than expected, projecting revenue of $7.9 billion, plus or minus $200 million, compared to the $9 billion estimate, and an adjusted EPS of $1.43, plus or minus 10 cents, versus the $1.92 estimate. This has led to a decline in Micron's stock price due to disappointing sales figures and a soft outlook for the next quarter. Despite these challenges, Micron's data center revenue reached a record high, accounting for over 50% of total revenue for the first time, highlighting strong performance in this segment. Analysts have mixed views on Micron's long-term prospects. Some, like Rosenblatt's Hans Mosesmann, remain optimistic with a Buy rating and a $250 price target, citing potential in the AI platform market and advantages in power efficiency for High-Bandwidth Memory (HBM) configurations. Others have lowered their price targets, reflecting caution due to current market conditions and guidance. While Micron faces short-term challenges, particularly in consumer markets, there is potential for long-term growth driven by AI and data center demand, with the company's focus on high-margin and strategic market segments potentially influencing future performance.