Micron Technology exceeded estimates due to strong demand for its memory chips, exceeding revenue projections for the third quarter.
Strong demand for Micron Technology’s memory chips drove the company to an increase on Wednesday, which topped predictions for third-quarter revenue. However, investors were surprised by the company’s current-quarter forecast because they were expecting the chipmaker to perform well in the AI boom. After the Idaho-based company predicted fourth-quarter revenue that was essentially in line with estimates, shares of the company slumped 7.2% during extended trading. This month, the stock had increased 13% ahead of earnings because of investor anticipation that Micron would profit from demand driven by AI.
Running Point Capital’s chief investment officer, Michael Schulman, stated, “Micron’s largely inline forecast may have been good enough two or three months ago, but is not enough to meet current lofty hopes, especially after a 67% year-to-date rally in its share price.” A lower prognosis than anticipated is mostly to blame for the price movement after hours, according to Ben Bajarin, an analyst at Creative Strategies. In contrast to a projection of $7.6 billion based on LSEG data, the corporation projected sales of $7.6 billion, plus or minus $200 million, for the current quarter.
Being one of the few suppliers of high-bandwidth memory chips utilized in the most sophisticated artificial intelligence systems, Micron is able to profit from the rising demand for semiconductors. Because Micron serves as a gauge of end-market and chip-type demand, the company’s performance typically sets the tone for chip industry earnings. In an interview, Micron Chief Business Officer Sumit Sadana stated, “We are very optimistic because Micron has a bigger exposure to AI growth than maybe any other semiconductor company, after Nvidia.”
The business declared that it has “sold out” HBM chips for the 2024 and 2025 fiscal years. Opens in a new tab. The chips are utilized in the AI processors created by Wall Street favorite Nvidia (NVDA.O). Based on LSEG statistics, Micron’s third-quarter sales of $6.81 billion were recorded, compared to an estimate of $6.67 billion. Following Micron’s results, Nvidia’s stock fell 1.4%, Advanced Micro Devices (AMD.O.) saw a 0.7% decline, and Intel (INTC.O.) saw a 0.4% decline.
Do Follow: CIO News LinkedIn Account | CIO News Facebook | CIO News Youtube | CIO News Twitter
About us:
CIO News is the premier platform dedicated to delivering the latest news, updates, and insights from the CIO industry. As a trusted source in the technology and IT sector, we provide a comprehensive resource for executives and professionals seeking to stay informed and ahead of the curve. With a focus on cutting-edge developments and trends, CIO News serves as your go-to destination for staying abreast of the rapidly evolving landscape of technology and IT. Founded in June 2020, CIO News has rapidly evolved with ambitious growth plans to expand globally, targeting markets in the Middle East & Africa, ASEAN, USA, and the UK.
CIO News is a proprietary of Mercadeo Multiventures Pvt Ltd.
