(Reuters) – Micron Technology shares plummeted 15% in premarket trading on Thursday following a dismal forecast that signaled a squeeze from weak demand for personal computers and smartphones, overshadowing a solid lift from sales of AI-related chips. The market for dynamic random-access memory (DRAM) chips, the company’s biggest revenue generator, has remained under pressure since the end of the pandemic amid a lingering supply glut.

Morgan Stanley analysts said the DRAM market appeared unhealthy and is slowly deteriorating, with the biggest weakness in the older technologies, typically indicating oversupply.

Micron anticipates low-single-digit percentage growth for smartphones in 2025. Global PC shipments slipped 1.3% in the third quarter to 62.9 million units, according to research firm Gartner.

Meanwhile, revenue from the company’s high-bandwidth memory (HBM) chips, a type of DRAM chip used to power advanced AI systems, more than doubled sequentially.

“Micron’s HBM story remains intact as the company has positioned itself to capitalize on market expansion opportunities from data center investments in 2025,” Piper Sandler analysts said.

The Boise, Idaho-based company is only one of the three HBM chip providers alongside South Korea’s SK Hynix and Samsung.

Demand for HBM chips has helped boost Micron’s stock by about 22% so far this year and analysts expect it to remain a key driver.

At least six brokerages cut their price targets on the stock following results, as per LSEG. Micron’s 12-month forward price-to-earnings ratio is 10.67, lower than Qualcomm’s 13.4 and Advanced Micro Devices’ 23.97.

(Reporting by Joel Jose in Bengaluru; Editing by Sriraj Kalluvila)