There is no way to put a positive spin on Micron Technology's (MU -3.91%) latest quarterly results, as the memory specialist put up disastrous numbers for the fourth quarter of fiscal 2022 (the three months ended Sept. 1) on Sept. 29.

The oversupply in the memory market sent Micron's top and bottom lines crashing. The outlook didn't inspire confidence either, as it suggests that things are about to get worse for the chipmaker. Let's take a closer look at Micron's latest numbers and see why this is a tech stock that investors may want to stay away from right now.

Micron Technology's numbers were terrible

Micron's fiscal Q4 revenue fell 20% year over year to $6.64 billion. Management attributed this big decline to "rapidly weakening consumer demand and significant customer inventory adjustments across all end markets." That's not surprising, as the sharp drop in shipments of personal computers (PCs) and smartphones this year knocked the wind out of the sails of the memory market. Weakening demand caused an oversupply, and that led to a drop in memory prices this year.

Market research firm TrendForce estimated in August that the price of dynamic random access memory (DRAM) could drop between 13% and 18% in the third quarter of 2022 over Q2. This didn't just weigh heavily on Micron's top line last quarter, but it also sent its margins packing. The company's non-GAAP operating margin dropped a whopping 12.1 percentage points year over year to 25% last quarter. As a result, Micron's adjusted earnings shrunk to just $1.45 per share, compared to $2.42 per share in the prior-year period.

The bad news for Micron doesn't end there, as memory prices are expected to plunge further. TrendForce expects DRAM prices to drop between 13% and 18% in the fourth quarter of 2022 on a sequential basis. This explains why Micron's guidance for the current quarter was woeful.

The company anticipates $4.25 billion in revenue this quarter at the midpoint of its guidance range, along with adjusted earnings of $0.04 per share. The top-line estimate points toward a 45% drop in Micron's revenue, while adjusted earnings will drop big-time from the prior-year period's figure of $2.16 per share.

In all, things are not looking good for Micron Technology right now. Even worse, investors shouldn't expect a turnaround any time soon from the chipmaker, as the state of oversupply in the memory market could persist through 2023.

When can investors expect a turnaround?

With PC and smartphone sales in a state of decline, the memory market is likely to remain under pressure. IDC estimates that the combined sales of PCs and tablets will drop 2.6% in 2023. Smartphone sales are forecast to drop 6.5% this year, according to IDC.

It wouldn't be surprising to see the weakness continue in 2023. The latest reports say Apple is scaling back its plans to increase iPhone 14 production on account of weak demand. This suggests consumers aren't willing to spend money on discretionary items such as smartphones at a time of surging inflation. All this indicates why TrendForce sees DRAM demand rising just 8.3% in 2023, which would be the first sub-10% increase in history.

DRAM supply, however, is expected to increase at a faster pace of 14.1% next year, indicating that prices could move further south. Of course, memory industry players are busy cutting their capital expenditure budgets in a bid to keep a handle on the supply, but it remains to be seen when these efforts will bear fruit and support prices.

Japanese memory manufacturer Kioxia plans to reduce production by 30% at two of its plants starting this month, citing weak demand. Micron also decided to reduce its capital spending in fiscal 2023 by 30% to $8 billion. The company's investments in wafer fabrication equipment will drop by a whopping 50% this fiscal year.

However, analysts don't expect these moves to pay off for Micron in fiscal 2023. Its top line is estimated to drop nearly 23% this fiscal year to $23.8 billion. Adjusted earnings could drop to just $2.99 per share from fiscal 2022's figure of $8.35 per share. Consensus estimates suggest a turnaround from fiscal 2024, with Micron's revenue expected to jump to nearly $30 billion and earnings increasing to $6.01 per share. But that also means that investors will have to endure a year of pain until the turnaround begins.

As such, Micron Technology is a stock that's best avoided right now, as things are likely to get worse before they get better for this chipmaker.