DBT Bureau
Bengaluru, 28 June 2024
Despite better than third-quarter performance, chip maker Micron has disappointed the streets as the fourth-quarter outlook failed to enthuse investors.
In recent days, investors are expecting earnings upgrades from all semiconductor companies on the back of rising demand for AI-powered chips.
Micron’s share price fell 7.12% on Thursday in Nasdaq to settle at $132.23 per share. This was despite a good Q3 performance of the company.
The US-based company reported a revenue of $6.81 billion, a rise of 81.6% over the same period last year. Its net income was at $702 million for the third quarter ended May.
“Robust AI demand and strong execution enabled Micron to drive 17% sequential revenue growth, exceeding our guidance range in fiscal Q3. We are gaining share in high-margin products like High Bandwidth Memory (HBM), and our data centre SSD revenue hit a record high, demonstrating the strength of our AI product portfolio across DRAM (dynamic random access memory) and NAND (flash memory). We are excited about the expanding AI-driven opportunities ahead, and are well positioned to deliver a substantial revenue record in fiscal 2025,” said Sanjay Mehrotra, President and CEO of Micron Technology in a release.
However, Micron’s outlook for the fourth quarter disappointed the street. The company expects a revenue of $7.6 billion during the ongoing quarter.
“We forecast CY24 bit demand growth for the industry to be in the mid-teens percentage range for both DRAM and NAND. Over the medium term, we expect industry bit demand growth CAGRs of mid-teens in DRAM and high teens in NAND,” the company pointed out in its investor presentation.
Analysts pointed out that Micron’s management has usually been conservative in their forecasts.
Micron’s performance weighed on share prices of other semiconductor stocks. Nvidia was down 1.91% to settle at $123.99 on Nasdaq on Thursday, while Broadcom’s share price fell 0.34% to $1,586.66. However, both AMD and Intel closed higher on Nasdaq.
