Micron's Stock Falters After Earnings... What's the Domestic Impact?

The median Q1 revenue guidance was presented at $61.5 billion, approximately 6% higher than the market forecast of $58.0 billion, and the average Q1 EPS guidance also recorded a figure approximately 3.1% higher than market expectations.

Micron's Q4 GPM recorded a robust 87%, exceeding expectations, but the Q1 GPM guidance is projected to be 86.25%, a 0.75 percentage point decrease from the previous quarter.

This anticipated decline in GPM has led investors to interpret it as margins having peaked, negatively impacting the stock price.

Q4 revenue growth was analyzed to be approximately 32% quarter-over-quarter.

Based on Q1 guidance, revenue is expected to grow by approximately 13.2% and EPS by approximately 14.1%.

While the growth rate itself is maintained, the reduced margin by which it exceeded expectations is believed to have influenced market disappointment and stock price reaction.

This case suggests that if earnings surprises and the macro environment conflict, the stock price may decline instead of immediately reflecting the earnings.

This stock price increase can be interpreted as the market's expectation of fundamental improvements having already been priced in.

If revenue growth is not sufficient to offset the margin decline, the debate over a peak could intensify, which is expected to negatively impact investor sentiment.

Investors tend to react immediately to headline news rather than complex calculations, and thus may be sensitive to news of margin decline.

While Micron's stock price rose by about 30%, Samsung Electronics and SK Hynix's stock prices only increased by just over 3% compared to late July, showing a significant discrepancy.

This suggests that supply and demand factors in the domestic market are having a greater impact on Korean semiconductor stock prices than issues specific to memory semiconductors.

However, it is noteworthy that SK Hynix's American Depositary Receipts (ADR) rose by 23%, showing a similar recovery trend to Micron.

U.S. semiconductor-related stocks have shown robust performance, rising over 11% recently, and individual stocks like Micron and SanDisk have also maintained strength.

However, Korea's Samsung Electronics and SK Hynix showed a relatively smaller increase from their July 30th lows, indicating a difference from the U.S. market.

This has led investors to look towards U.S. big tech stocks, seeking higher returns.

During Samsung Electronics and SK Hynix's share buyback periods, institutional and foreign investors offloaded their holdings, limiting stock price increases and, paradoxically, providing a selling opportunity for investors seeking rebalancing.

The analysis suggests that during the share buyback period, institutional and foreign investors offloaded their holdings, leading to limited stock price increases.

It's time to assess whether the distorted supply and demand will normalize based on fundamentals once the share buyback concludes.

The fear that additional selling pressure will emerge even after the share buyback period ends is deemed excessive.

Foreign investors move based on fundamental data such as margin rates, so there is a possibility of rotation in response to Micron's earnings announcement and semiconductor price trends.

Micron's Q1 EPS guidance, at $38.1-$39, was higher than expected, suggesting continued growth numerically.

However, as the market average was not high, this growth was not significantly highlighted, and investors tended to interpret the margin decline signal as a 'peak-out'.

Despite sustained actual profit growth, short-term anxiety is overshadowing positive market signals.

Despite continued memory investment and strengthening AI fundamentals, this has not yet been sufficiently reflected in the domestic stock market.

A supply-demand vacuum is expected until Samsung Electronics and SK Hynix's earnings announcement on October 29, and stock price increases are unlikely to gain momentum until the last week of October, when the direction of big tech companies' AI investments is confirmed.

AI fundamentals have strengthened, but this has not yet been fully reflected in Korean domestic stocks, creating a disparity between fundamentals and supply/demand.

The period until mid-October is a supply-demand vacuum for normalization and earnings confirmation. Samsung Electronics and SK Hynix's earnings announcement on October 29 and confirmation of big tech companies' earnings guidance will be crucial variables for stock price trends.

It is highly probable that a supply-demand vacuum with no special variables will continue until October 29.

The gradual deceleration in semiconductor price growth was an anticipated trend, and revenue and operating profit growth continue, so it's difficult to conclude that overall profit growth has stalled.

While the figures released today are likely to be interpreted as a 'peak-out' by the market, it's important to also consider the impact of fundamental changes in the business structure.