What happened

Micron Technology (MU -0.89%) stock dodged a bullet yesterday. After analysts at Lynx Equity Strategies downgraded the computer-memory maker to "sell" on Thursday, you might have expected investors to react by, well, selling the stock. But instead, Micron shares eked out a modest 0.2% gain.

No such luck today, however. Micron just got hit by its second downgrade in two days, with Cleveland Research cutting the stock to "neutral." In afternoon trading, Micron shares are down 4.6% by 1:30 p.m. EDT.  

Big red arrow going down over a stock chart.

Image source: Getty Images.

So what

So why did Micron escape damage yesterday but get caught today? Probably, the fact of the second downgrade coming so soon on the heels of the first added credence to Lynx's warning. Possibly, the confusing nature of Lynx's warning also contributed to investors' decision to give Micron a pass yesterday.

And Lynx's downgrade was pretty confusing. Despite cutting its rating to "sell," according to StreetInsider.com, Lynx put a $100 price target on Micron. But with Micron shares selling for closer to $80 at the time, the $100 price target actually kind of made Micron look like more of a buy than a sell!

Nevertheless, the other comments Lynx made were pretty cutting: Citing reported reductions in mobile memory by Apple (AAPL 0.47%), Lynx said it has been worried about "the longevity of the memory cycle" for more than a month. Indeed, Lynx now predicts that the current "memory cycle" (i.e., rising demand for computer and smartphone memory) could now end "a couple of quarters earlier than we had envisaged" -- perhaps even as early as February 2022.

Now what

Thus, while many other analysts think Micron can look forward to 50%-plus gross margins on its products next year, Lynx now believes that margins in "the high 40s%" are more likely as demand begins to wane.

Indeed, Lynx's warnings, echoed by Cleveland Research, suggest investors can now look forward to "weakness" in demand for computer memory in both China and India. Together, they account for 40% of global smartphone sales, resulting in only "low single digit" growth in sales volume next year -- and falling profit margins, too.

Long story short: This could be bad news for Micron...but not only for Micron.