Shares of Micron (NASDAQ: MU) are down nearly 2% in pre-open trading Thursday despite the company topping market Q3 estimates for profit, sales, and guidance on worries the best has been seen.

Micron’s revenue came in at $7.42 billion for the quarter that ended June 3, 36% higher than in the year-ago period and more than analysts’ expectations of $7.23 billion.

“Micron set multiple market and product revenue records in our third quarter and achieved the largest sequential earnings improvement in our history,” said Micron’s CEO Sanjay Mehrotra in a statement.

The company reported adjusted, non-GAAP earnings of $1.88 per share, more than analysts’ estimates of $1.71 per share, while non-GAAP gross margins stood at $42.9%, beating the company’s own guidance of 41.5%. Micron’s non-GAAP net income in the quarter surged 93% to $2.2 billion.

Micron said it expects revenue of roughly $8.2 billion for the current quarter, up from analysts’ expectations of $7.9 billion. The memory chip and data storage producer also expects non-GAAP earnings of around $2.30 per share, compared to Wall Street estimates of $2.18 a share. It also said it expects non-GAAP gross margin to rise by 47% in the August quarter.

In addition to the Q3 earnings report, Micron also announced a deal to sell its Lehi, Utah, fab to Texas Instruments (NASDAQ: TXN) for $1.5 billion, consisting of $900 million in cash and about $600 million in value from select tools and other assets.

“Micron has sold some of these assets and will retain the remainder to redeploy to its other manufacturing sites or sell to other buyers,” the company said in a statement.

Micron intends to pursue new memory solutions for data centers.

Despite a solid Q3 report, Summit Insights analyst Kinngai Chan downgraded shares to “Hold” from “Buy” on peaking favorable industry dynamics and expectations that earnings will moderate next year.

“We believe the favorable memory demand-supply dynamics will peak in 2H21 due to seasonal build coupled with many of its end customers changing their inventory management tactics from just-in-time to just-in-case. While we believe DRAM and NAND contract pricing will continue to improve sequentially into the August quarter, we believe pricing is nearing a near-term peak,” the analyst said in a note.

“Based on our industry research, we now expect a limited room for further price increase as we are moving into the Nov and Feb quarters. Additionally, we see early signs of some component inventory build in the PC and smartphone supply chain. Thus, we are downgrading MU to hold as we expect earnings outperformance to moderate into CY22.”

Unlike Chan, Mizuho analyst Vijay Rakesh used the Q3 earnings report to hike the price target on the Buy-rated MU to $107.00 per share from $104.00 per share.

“We see MU well positioned for a strong 2021, with DRAM (73% of revenues) and NAND supply both expected tight into C22; 5G handsets expected up >2x y/y, improving 2H21 data center, PCs remaining solid, benefits from buyback resuming in the AugQ, and structural improvements to cost with the Lehi fab sale. Some GM headwinds noted were Covid-mitigation and DDR5 costs, while demand declined in SE Asia and India from Covid,” Rakesh wrote in a memo.