Computer memory manufacturer micron (NASDAQ:MU) The stock fell 16.5% as of 9:45 a.m. ET Wednesday, even as the company reported earnings that met or exceeded targets set by Wall Street for the first quarter of fiscal 2025.

Micron was supposed to report earnings of $1.77 per share on revenue of $8.7 billion, but Micron actually reported earnings of $1.79 per share and revenue of $8.7 dollar1 Billions – in both sales and profits, albeit just barely.

Not all of Micron’s news was good. Adjusted for one-time items (i.e. non-GAAP), the company may have earned $1.79 per share. But Micron’s profit, when calculated using generally accepted accounting principles (GAAP), was just $1.67 per share.

Still, this was better than GAAP net income Loss Micron reported more than double the GAAP profit in Q1 last year that Micron only posted in its most recent quarter, Q4 of fiscal 2024. Micron’s Q1 revenue also grew 85% year-over-year, led by amazing growth in the company’s data center business (i.e. cloud computing and artificial intelligence). Data center revenue increased 40% quarter-over-quarter 400% compared to last year!

CEO Sanjay Mehrotra highlighted Micron’s data center business, which now generates more than half of the company’s total revenue, and said Micron continues to gain market share in this “strategically important” business.

Why are investors selling Micron shares today? In a word: orientation.

Micron told investors it expects second-quarter fiscal 2025 revenue of $7.9 billion with a gross profit margin of about 37.5%, resulting in earnings per share of about $1.26 ( GAAP) or $1.43 (non-GAAP). And here’s why that’s a problem:

Wall Street had expected Micron to promise much more: $9 billion in sales and $1.97 in earnings per share. Even assuming these are non-GAAP numbers, Micron just told us it will miss that guidance by about 28%.

No matter what micron Is Still promising – $1.26 – represents a 200% increase in earnings per share compared to last year. At less than 25 times today’s earnings, Micron stock looks cheap.

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