Micron shares taking a dive on week's second quarter guidance, but what the drop might not reflect

signs of strength for the chipmaker, especially in its AI-related business.

Dear Drubosa digs into the details for today's tech check, AD.

Hey, good morning, Leslie.

So the good news for AI Bulls is that Micron's disappointing quarter was not related to its AI business.

As Leslie just said, you saw 46% jump in data center, which now makes up more than half of all sales.

And the company said that AI and upgrades of traditional servers will grow server unit shipments more than expected this year.

The downside, though, is that where it was weak, consumer-related chip

markets like PCs and smartphones, that might signal that the AI upgrade device cycle is not

gaining the kind of momentum investors we're hoping for. And that could fit into this larger narrative

of a digestion phase. The idea that after the initial rush to adopt AI technologies and infrastructure, companies

and consumers are hitting a pause to digest them.

Devices are increasingly part of the AI story because features are supposed to drive upgrades,

progress in the models themselves, chat GPT, anthropic, Gemini.

They drive use cases.

But that's not happening the way that

some had hoped, and that could hit the whole ecosystem. JPM cited a recent survey that highlighted

lower momentum for the iPhone 16 cycle relative to the 15 on still lower awareness for Apple intelligence.

Those are its AI features. Now, that tracks with what we heard on Micron's

earnings call last night. Its mobile business unit saw a 19% quarter over quarter decline. PC's not

any better. Micron forecasting, that market to grow just around 5% in 2025, most of that coming

in the second half. Now, here's the takeaway. If AI device sales are not getting that

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