Micron shares jump 15% after strong quarterly results
Shares of Micron Technology jumped 15% after the company reported strong demand for its memory chips and significantly exceeded market expectations for the first quarter of its fiscal year.
Micron, which specializes in storage chips used in computers and artificial intelligence servers, explained that the needs of data centers were driving the demand for its products.
What’s happening:
Shares of Micron Technology surged in after-hours trading on Wednesday, following the release of the company’s fiscal first-quarter results.
Micron shares jump more than 15% after strong quarterly results
What happened:
The chip company reported sales and earnings for the latest quarter significantly higher than expected.
Micron also issued a higher-than-expected forecast for the second quarter.
How were the results:
The Boise, Idaho-based company reported double-digit sales growth for the first quarter.
Revenues surged around 20.5% year-over-year to $13.64 billion, topping consensus estimates of $12.83 billion.
Adjusted earnings came in at $4.78 per share, surpassing Wall Street expectations of $3.95 per share.
Why it matters:
Micron has been witnessing high demand for its chips, as these are a fundamental component in smartphones, computers, electric vehicles and datacenter servers. The company is also one of key suppliers of high-bandwidth memory (HBM) chips, crucial for AI models.
Micron reported upbeat demand from datacenters, driven by higher spending by large-scale cloud service providers. The company has been adjusting its manufacturing facilities to increase its focus on meeting the surging demand from AI datacenters.
Micron shares jump after record revenues
“In fiscal Q1, Micron delivered record revenue and significant margin expansion at the company level and also in each of our business units,” CEO Sanjay Mehrotra said.
Operating cash flows jumped to $8.41 billion, from $5.73 billion in the previous quarter and significantly from $3.24 billion in the year-ago period.
The board declared a quarterly dividend of 11.5 cents per share.
For the fiscal second-quarter, Micron guided to revenues of $18.7 billion, plus or minus $400 million, higher than market expectations of $14.16 billion. The company projected earnings of $8.42 per share, plus or minus 20 cents.
Micron shares
How shares responded:
Micron’s stock jumped 8% to $243.74 in the extended trading hours following the release of quarterly results. The stock has climbed more than 158% year to date.
What to watch:
Investors will keep an eye on surging AI demand. Markets will also watch Micron’s ability to expand production, after CEO Sanjay Mehrotra said the company is likely to meet just half to two-thirds of the demand from various major customers.
