Micron Forecasts 10.7B Revenue, Stock Jumps 7% on AI Demand

Micron Technology, the largest storage chip manufacturer in the United States, has released an optimistic forecast for its fourth quarter, driven primarily by the increasing demand for AI devices. The company, based in Boise, Idaho, announced that it expects revenue for the fourth fiscal quarter to reach approximately 10.7 billion dollars, far exceeding the average analyst estimate of 9.89 billion dollars. This positive news has led to a surge in the company's stock price during after-hours trading.

The surge in demand for high-performance storage solutions, driven by the growing complexity of AI software, has led to a significant increase in the demand for Micron's high-bandwidth memory products. The company anticipates that this trend will continue as the need for memory capacity grows due to the increasing complexity of AI software. Additionally, Micron is gradually recovering from the narrowing profit margins experienced in the previous quarter.

In a statement, the CEO emphasized the company's commitment to maintaining record revenue growth while making prudent investments to solidify its technological leadership. The company aims to meet the growing demand for AI-driven memory needs through its superior manufacturing capabilities. Micron also expects adjusted earnings per share for the fourth quarter to be around 2.50 dollars, significantly higher than the market expectation of 2.03 dollars.

In the third fiscal quarter, which ended on May 29, Micron's sales increased by 37% year-over-year to 9.3 billion dollars, surpassing the analyst estimate of 8.85 billion dollars. The company's adjusted earnings per share for the quarter were 1.91 dollars, 19% higher than the market consensus of 1.60 dollars. This strong performance is attributed to the company's expansion into new markets, including electric vehicles and gaming chips, in addition to its focus on the AI sector.

Micron's robust growth projections have made it one of the most closely watched stocks in the semiconductor industry this year. The company's stock has seen a year-to-date increase of 51% as of the close of trading on Wednesday. Following the release of the earnings report, the stock price rose by more than 7% during after-hours trading.