Memory-chip maker Micron Technology exceeded expectations in its fiscal second quarter, reporting a surprise profit and strong sales driven by artificial-intelligence infrastructure spending. The company’s earnings of 42 cents per share on sales of $5.82 billion far surpassed analysts’ estimates of a 25-cent loss on $5.35 billion in sales. Micron’s optimistic guidance for the current quarter, predicting earnings of 45 cents per share on sales of $6.6 billion, also exceeded analyst expectations.
Micron’s stock surged more than 13% in after-hours trading following the earnings report, reaching $108.90. CEO Sanjay Mehrotra credited the company’s success to strong execution on pricing, products, and operations, positioning Micron well for a robust fiscal second half of 2024. Analysts believe that Micron is poised to benefit from the semiconductor industry’s multiyear opportunity in artificial intelligence, boosting investor confidence and raising price targets for the stock. Micron’s high-bandwidth memory chips, such as HBM3e products, are expected to play a significant role in the AI infrastructure spending boom, competing with industry giants like Samsung and SK Hynix.
This positive momentum reflects a broader optimism for Micron’s recovery in the memory-chip market, with the company’s stock price surging 65% in the past year. As one of the largest beneficiaries of the AI revolution in the semiconductor industry, Micron’s strategic positioning and strong product portfolio continue to drive growth and investor interest. The company’s success in navigating a challenging market environment and delivering exceptional results underscore its resilience and potential for continued success in the rapidly evolving tech landscape.