Micron Technology Inc, Wall Street’s favorite chipmaker this year, rose in early trading on Thursday after reporting stronger profit and revenue for the latest quarter than analysts expected.
Chief executive officer Sanjay Mehrotra said in a conference all on Wednesday that Micron was seeing growing memory demand driven by artificial intelligence (AI), and the company gave a forecast for profit in the current quarter that topped analysts’ expectations.
Micron was 0.3 percent higher early Thursday, along with Nvidia Corp, another big AI winner, with added 0.5 percent to bring its gain for the year to 15.3 percent.
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Revenue for this quarter will be roughly US$10.7 billion, the company said on Wednesday. That was well ahead of the US$9.89 billion average analyst estimate. Profit will be around US$2.50 a share, excluding certain items, compared with a projection of US$2.03.
Sales rose 37 percent year-on-year to US$9.3 billion last quarter, which ended on May 29. Analysts had estimated US$8.85 billion. Earnings were US$1.91 a share, excluding some items, compared with an average prediction of US$1.60.
A key focus on the conference call was high-bandwidth memory (HBM), a component used in AI computing. The technology is fueling a sales surge at Micron, and analysts peppered Mehrotra with questions about HBM, trying to get a sense of how much growth is coming.
However, the company didn’t predict the kind of runaway growth that some investors were looking for.
HBM has become the star of Micron’s business. It is used in machines that develop and run AI tools. The company expects continued growth from that market as such software becomes more complex, requiring bigger amounts of memory. The company is also starting to recover from narrower profit margins in the previous quarter.
In addition to pursuing more AI revenue, Boise, Idaho-based Micron is looking to sell more memory to other areas, such as electric vehicles and gaming chips, Synovus Financial Corp senior portfolio manager Dan Morgan said in an earlier note.
The growth prospects have turned Micron into the chip industry’s hottest stock this year, with the shares gaining 51 percent through Thursday’s close.
Additional reporting by AP
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