Record sales in the chip maker's higher-performing memory chip for AI were not enough of a boost.

Micron Technology was the second-worst-performing stock on the S&P 500 on Friday, after positive earnings results met expectations but several analysts expressed concern about lower profits in the chip maker's core memory business.

Shares of Micron Technology Inc. were down around 8% in Friday trading, where the stock was the worst performer on the Nasdaq 100. It also helped drag down the S&P 500, where it was the second-worst performer, according to Dow Jones Market Data.

On Thursday, Micron reported better-than-expected fiscal second-quarter earnings. But on the company's call with analysts, management discussed issues with the core memory business - including startup costs for a new dynamic random access memory chip plant in Idaho - that led some analysts to lower earnings estimates or downgrade the stock.

Micron's high-bandwidth memory for artificial-intelligence servers surpassed $1 billion in revenue, but that was not enough to further boost overall profits.

While Micron posted better-than-expected results due to increased demand for its high-bandwidth memory, Angelo Zino, an analyst with CFRA Research, said that the company's guidance on gross margins "was largely in line, but a disappointment to many." Zino lowered his earnings estimates for fiscal 2025, which ends in August, to $6.90, down from $7.39 a share, and for fiscal 2026 to $10.98 from $11.40, "on a more conservative margin profile."

While BofA analyst Vivek Arya likes Micron's high-bandwidth AI memory business, "we are surprised it's not helping Micron's profitability," he wrote in a note to clients. "Despite record sales from AI tailwinds, Micron's gross margins remain weak." Micron guided to gross margins of 36.5% for the fiscal third quarter, down from 37.9% in the second quarter. In the fourth quarter, margins are expected to grow "only slightly." Arya reiterated a neutral rating on the stock and slightly lowered estimates.

In addition, in the company's NAND, or flash, business, average selling prices declined about 18% in the quarter, according to Raymond James analyst Srini Pajjuri. He added that inventories for consumer products such as smartphones, which had been piling up, are starting to normalize.

Last quarter, Micron executives talked about weaker conditions in the NAND business and a buildup of inventory in the consumer segments, where inventory adjustments were occurring.

Micron's stock was heading toward its lowest close since March 11, 2025, when it closed at $89.05.