What factors could impact MU's Q3 2025 EPS performance?

Micron Technology's (MU) Q3 2025 EPS performance could be influenced by several key factors: 1. **Market Demand and Product Mix**: The company's EPS guidance for Q3 2025 is $1.470 to $1.670, which is slightly below the consensus estimate of $1.520. This variance could be due to the product mix and market demand. For instance, if the demand for higher-value products like high-bandwidth memory (HBM) and dynamic random-access memory (DRAM) exceeds supply, it could positively impact EPS. Conversely, if there is a higher demand for lower-value products or if supply exceeds demand, it could negatively affect EPS. 2. **Gross Margin Pressure**: Micron anticipates a gross margin of 36.5% in Q3 2025, which is down 200 basis points from the prior quarter and below the Street estimate of 38.7%. This decline in gross margin could pressure EPS if the company is unable to offset increased costs through operational efficiencies or pricing strategies. 3. **Pricing Challenges**: The company has faced pricing challenges in the NAND flash and consumer product sectors, which have led to a decline in gross margin. If these challenges persist in Q3 2025, they could negatively impact EPS. 4. **Inventory Management**: The impact of high-cost inventory, as noted by Needham analyst N. Quinn Bolton, could affect EPS if the company is unable to manage inventory effectively. High inventory levels can lead to higher costs and potential obsolescence, which could negatively impact profitability. 5. **New Product Launches and Technology Leadership**: Micron's plans to launch new products could extend its technology leadership and potentially improve profitability in the long term. However, the impact on Q3 2025 EPS would depend on the timing of these launches and the associated costs. 6. **Macroeconomic and Geopolitical Factors**: Any macroeconomic downturns or geopolitical events that affect demand or supply chains could impact MU's Q3 2025 EPS. For example, if there is a global slowdown that reduces demand for MU's products, it could lead to lower revenues and potentially lower EPS. In conclusion, Micron Technology's Q3 2025 EPS performance will likely be influenced by a combination of market demand, product mix, gross margin pressure, pricing challenges, inventory management, new product launches, and macroeconomic and geopolitical factors.