Memory chip leader Micron Technology (MU) announced strong earnings that exceeded expectations, leading to a surge in its stock price following their latest report. In extended trading on Wednesday, Micron’s shares skyrocketed over 13% after posting an adjusted earnings figure of $1.18 per share on revenues of $7.75 billion for the fiscal fourth quarter ending August 29. This performance surpassed analysts’ forecasts, who had anticipated earnings of $1.11 per share on $7.65 billion in sales. A year ago, the company reported a loss of $1.07 per share on revenue of just $4.01 billion.
For the upcoming fiscal first quarter, Micron predicted robust adjusted earnings of $1.74 per share, with anticipated sales of $8.7 billion, again outpacing Wall Street’s expectations. Analysts had forecast earnings of $1.52 per share on $8.27 billion in sales. This significant turnaround from a year ago, when Micron posted a loss of $0.95 per share on $4.73 billion in sales, highlights the company’s strong recovery trajectory.
In after-hours trading, MU stock reached $108.32, following a 1.9% increase during Wednesday’s regular session, which closed at $95.77. Micron’s impressive performance has been primarily driven by surging demand for data center DRAM products and high-bandwidth memory, largely fueled by the growing interest in artificial intelligence (AI).
CEO Sanjay Mehrotra emphasized that Micron achieved an incredible 93% year-over-year revenue increase in fiscal Q4, underlining the impact of AI on their business. He stated, “We are entering fiscal 2025 with the best competitive positioning in Micron’s history,” and foresees record revenues and improved profitability for the upcoming fiscal year.
Micron’s revenue composition has shifted significantly, with Dynamic Random-Access Memory (DRAM) contributing 69% of total revenue in Q4, while NAND flash memory accounted for the remaining 31%. Continual growth in solid-state drive sales for data centers has been a key driver of Micron’s success.
Despite the positive earnings, some Wall Street analysts had shown apprehension about Micron’s prospects, with at least seven firms lowering their price targets ahead of the earnings release. Currently, Micron is ranked sixth out of nine stocks within IBD’s Computer-Data Storage industry group, indicating that while there’s recognition of its growth potential, the company still has some hurdles to overcome. The stock holds a composite rating of 38 out of a possible 99 in Investor’s Business Daily’s rating system.
The market’s positive reaction to Micron’s results comes amidst a robust wave of growth in the semiconductor industry, particularly focused on AI technologies. As the landscape of technology and investment continues evolving, Micron’s performance may act as a bellwether for future trends within the sector.
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