Micron Tech beats income estimates on AI chip demand; shares fall after run-up By Reuters

By Harshita Mary Varghese and Max A. Cherney

(Reuters) -Micron Expertise beat estimates for third-quarter income on Wednesday pushed by sturdy demand for its reminiscence chips, however its current-quarter forecast disillusioned buyers who had been upbeat in regards to the chipmaker’s efficiency within the AI growth.

Shares of the Idaho-based agency fell 7.2% in prolonged buying and selling after it forecast fourth-quarter income largely in step with expectations. The inventory had risen 13% this month, forward of earnings, on investor optimism that Micron (NASDAQ:) would profit from AI-driven demand.

“Micron’s largely inline forecast could have been adequate two or three months in the past, however is just not sufficient to fulfill present lofty hopes, particularly after a 67% year-to-date rally in its share value,” stated Michael Schulman, chief funding officer at Operating Level Capital.

The worth transfer after hours is essentially on account of a weaker forecast than anticipated, stated Ben Bajarin, analyst at Inventive Methods.

The corporate forecast income of $7.6 billion, plus or minus $200 million, for the present quarter, in contrast with an estimate of $7.6 billion, in accordance with LSEG information.

Micron is without doubt one of the few suppliers of high-bandwidth reminiscence chips utilized in probably the most superior AI techniques, permitting it to money in on surging demand for the semiconductors.

The corporate’s outcomes normally set the tone for earnings within the chip sector, as Micron acts as an indicator of demand for varied sorts of chips and end-markets.

“We’re very optimistic as a result of after Nvidia (NASDAQ:), Micron has a much bigger publicity to AI development than maybe some other semiconductor firm,” Micron Chief Enterprise Officer Sumit Sadana stated in an interview.

The corporate stated its HBM chips had been “offered out” for the 2024 and 2025 calendar years. The chips are used within the AI processors designed by Wall Road darling Nvidia.