Micron Technology exceeded third-quarter revenue expectations driven by robust demand for its memory chips. However, its fourth-quarter forecast, which met expectations, fell short of investor hopes amidst high expectations in the AI sector.
Shares of the Idaho-based firm dropped 7.2% in extended trading following the announcement. Analysts and investors had anticipated greater growth momentum, particularly benefiting from AI-driven demand, after the stock had surged 13% this month.
According to Michael Schulman of Running Point Capital, Micron's forecast, though largely in line with estimates, did not meet current optimistic projections, especially following a substantial 67% increase in its share price year-to-date.
Ben Bajarin from Creative Strategies noted that the after-hours stock movement reflected disappointment over the weaker-than-expected forecast.
For the current quarter, Micron forecasted revenue of $7.6 billion, plus or minus $200 million, aligning closely with market expectations. The company's high-bandwidth memory (HBM) chips, crucial for advanced AI systems, continue to see strong demand, with Micron reporting that HBM chips are "sold out" through 2025.
Micron's performance is closely watched as an indicator of broader semiconductor demand trends. Despite the positive third-quarter results, the AI growth outlook did not meet heightened investor expectations following recent industry excitement.
Sumit Sadana, Micron's Chief Business Officer, expressed optimism about their AI exposure, positioning Micron prominently alongside Nvidia in benefiting from AI-driven semiconductor demand.
Following Micron's earnings report, shares of Nvidia, Advanced Micro Devices (AMD), and Intel experienced minor declines.
