Micron stocks decline following revenue projections that fall short of expectations.

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Stock Decline for Micron Following Revenue Projections Below Expectations

Investors witnessed a 3% drop in Micron stocks during extended trading after the company revealed a revenue forecast that did not surpass expectations. While Micron’s performance in the fiscal third quarter ended May 30 exceeded LSEG consensus estimates with 62 cents adjusted earnings per share versus the expected 51 cents and $6.81 billion in revenue versus the expected $6.67 billion, the outlook for the current quarter fell short.

Looking ahead, Micron anticipates adjusted earnings per share of $1.08 on a revenue of $7.6 billion. Although these numbers align with analyst expectations, it seems investors were hoping for a more substantial projection. The company’s shares have seen significant growth over the past year, buoyed by the surge in artificial intelligence demand. Micron’s cutting-edge memory technology caters to AI GPUs like Nvidia’s, positioning them well to benefit from the increasing need for AI-related technology.

CEO Sanjay Mehrotra emphasized the importance of Micron’s AI business while acknowledging the sluggishness in the smartphone and PC markets. Despite challenges in these sectors, Micron reported a notable turnaround in net income, moving from a $1.9 billion loss in the previous year to a $332 million profit in the recent quarter, showcasing the company’s resilience and adaptability.

Mehrotra highlighted the growing significance of AI-driven demand in data centers, noting a 50% increase in their data center business on a quarter-to-quarter basis. This surge in demand has led to supply constraints on their leading-edge nodes, driving price hikes. The company remains optimistic about its future prospects, particularly in the AI space where their high bandwidth memory is already sold out through 2025. Micron foresees continued growth and market leadership in the semiconductor industry, fueled by the expanding AI landscape.

In a statement, Mehrotra expressed confidence in Micron’s position as a major player in the semiconductor sector, poised to thrive in the evolving AI-driven market. Despite the immediate challenges in the PC and smartphone markets, Micron remains focused on leveraging its strengths in AI technology to drive future growth and innovation.

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