Micron Know-how Inc., the biggest US maker of pc reminiscence chips, gained essentially the most in almost 13 years after giving surprisingly sturdy gross sales and revenue forecasts, helped by demand for synthetic intelligence gear.
Fiscal first-quarter income might be about $8.7 billion, the corporate stated in a press release Wednesday. That compares with a median analyst estimate of $8.32 billion. Revenue might be about $1.74 a share, minus sure objects, versus a projection of $1.52.
The rosy outlook is the newest signal that Micron is benefiting from a growth in AI spending. Orders for a kind of product known as high-bandwidth reminiscence have added a profitable new income stream for the corporate and different chipmakers. The expertise helps develop AI techniques by offering extra fast entry to large swimming pools of knowledge.
Demand has been outpacing provide, letting Micron enhance costs and safe long-term assured contracts. It’s already bought out of the product for 2024 and 2025, the corporate stated Wednesday.
The shares rose 15% at $109.88 in New York buying and selling, their largest single-day achieve since December 2011. The inventory is up 29% this yr.
Outcomes from Micron’s fiscal fourth quarter additionally handily beat estimates. Income elevated 93% to $7.75 billion within the interval, which ended Aug. 29. Excluding sure objects, revenue was $1.18 per share. On common, analyst had estimated a revenue of $1.12 a share and income of $7.66 billion.
Micron has an edge as a result of it’s the primary chipmaker to reliably supply extra superior reminiscence in excessive volumes, Govt Vice President of Operations Manish Bhatia stated in an interview. With firms racing to beef up their AI software program and {hardware} — and utilizing extra reminiscence within the course of — Micron is in a great place, he stated.
The chipmaker is also rising from a slowdown in demand for private computer systems and smartphones, two of the most important markets for reminiscence. System shipments at the moment are rising once more, Micron stated. These gadgets will more and more characteristic AI performance that requires extra reminiscence chips to work correctly, including an additional profit, Bhatia stated.
Micron makes dynamic random entry reminiscence, or DRAM, a kind of chip that quickly holds data and works alongside processors from firms equivalent to Nvidia Corp. and Intel Corp. It additionally make Nand flash reminiscence — semiconductors that retailer data in every thing starting from data-center computer systems to smartphones.
“Robust AI demand drove a strong ramp of our data center DRAM products,” Chief Govt Officer Sanjay Mehrotra stated within the assertion. “We are entering fiscal 2025 with the best competitive positioning in Micron’s history.”
The corporate is one in all solely a handful which have survived the trade’s brutal boom-and-bust cycles over the gadgets. These swings in demand have made it troublesome keep constant earnings, however the firm has been rising from the newest downturn. The chipmaker competes with South Korea’s Samsung Electronics Co. and SK Hynix Inc. within the reminiscence market.
(Updates with closing worth within the fifth paragraph.)
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