[ad_1]
Memory chip manufacturer Micron technology (MU) on Wednesday night crushed Wall Street’s targets for its fiscal second quarter and posted a surprise profit. It also guided the outlook much higher for the current quarter, citing an increase in sales due to spending on artificial intelligence infrastructure. Micron shares rose on the news.
x
The Boise, Idaho-based company earned an adjusted 42 cents per share on sales of $5.82 billion in the quarter ended Feb. 29. Analysts surveyed by FactSet expected Micron to lose 25 cents a share on sales of $5.35 billion. In the same period a year earlier, Micron lost an adjusted $1.91 per share on sales of $3.69 billion.
For the current quarter, Micron predicted adjusted earnings of 45 cents per share on sales of $6.6 billion. Analysts had expected earnings of 9 cents a share on sales of $6 billion in the fiscal third quarter. In the same period a year earlier, Micron lost an adjusted $1.43 per share on sales of $3.75 billion.
Heading into its fiscal second-quarter report, Micron had posted five consecutive quarters of losses amid a cyclical downturn.
Micron Stocks Rise After Report
In after-hours trading on the stock market today, Micron shares rose more than 13% to 108.90. During Wednesday’s regular session, Micron shares rose 2.4% to close at 96.25.
“Micron delivered fiscal second-quarter results with revenue, gross margin and EPS (earnings per share) well above the high end of our guidance range, a testament to our team’s excellent execution on pricing, products and operations,” he said. CEO Sanjay Mehrotra in a press release.
He added: “Our outstanding product portfolio positions us well to deliver a strong fiscal second half of 2024. We believe Micron is one of the largest beneficiaries in the semiconductor industry of the multi-year opportunity offered by AI.”
Micron shares have risen this year on hopes of a recovery in the memory chip market. In the past 12 months through Wednesday’s close, Micron shares are up 65%.
At least five Wall Street firms raised their price targets for Micron stock this week ahead of the company’s earnings report.
Micron is also benefiting from booming AI infrastructure spending thanks to its high-bandwidth memory chips, including HBM3e products. Micron competes with Samsung and SK Hynix in selling high-bandwidth memory chips for data centers.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
YOU MAY ALSO LIKE:
Nvidia adds artificial intelligence to Teradyne industrial robots
Apple’s focus on AI could reduce profit margins, analyst says
Nvidia is one or two steps ahead of rivals in AI chips: analyst
Find Winning Stocks with MarketSurge Pattern Recognition and Custom Screens
See Stocks on the Leaders List Near a Buy Point