Micron Technology (MU.O) has predicted that third-quarter revenue increased Wall Street expectations. This was brought by rising demand for its high-bandwidth memory (HBM) chips used in artificial intelligence (AI) models. Following the announcement, Micron’s shares climbed 2% in after-hours trading.
The increasing adoption of AI has greatly boosted the need for Micron’s HBM chips. It is a type of dynamic random access memory (DRAM) important for high performance computing, including Nvidia’s (NVDA.O) AI processors. According to Micron’s Chief Business Officer, Sumit Sadana, the company anticipates continued sequential growth throughout 2025 as it scales up production capacity. Also it expands its market share in HBM technology. He further said that all of Micron’s HBM chips are already sold out for 2025. This highlights the huge demand in the industry.
Beyond HBM, Micron is also a key supplier of flash memory NAND chips, which are important for data storage solutions. The company predicted strong growth in both DRAM and NAND markets, fueled by expanding data center infrastructure. Moreover increasing consumer adoption of high-performance computing devices. With these developments, Micron expects huge improvement in profitability in its fiscal year 2025, ending in August.
Michael Ashley Schulman, Chief Investment Officer at Running Point Capital, noted that Micron’s impressive forecast surpasses analyst expectations on both revenue and earnings. It imposed its important role in supplying important memory components for AI-driven infrastructure.
While the company has not factored in potential new U.S. tariffs under former President Donald Trump’s trade policies, Micron plans to pass any additional costs onto customers should such tariffs be imposed. The unpredictability of tariff policies has introduced economic uncertainty, but Micron remains focused on sustaining growth.
For the upcoming third quarter, Micron projects revenue of approximately $8.80 billion, with a variance of plus or minus $200 million. This outlook surpasses the market estimate of $8.5 billion, as per LSEG data. In the recently concluded second quarter, the company reported revenue of $8.05 billion, outperforming analyst projections of $7.89 billion. Additionally, Micron’s earnings per share stood at $1.56, surpassing the estimated $1.42 per share.
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Additional Insights:
- Technological Advancements: Micron is actively investing in next generation HBM advancements, including HBM4, which is expected to further important memory bandwidth and efficiency for AI workloads.
- Competitive Landscape: As Micron gains traction in the HBM market, it is positioning itself as a strong competitor to rivals like SK Hynix and Samsung, both of which also manufacture AI focused memory solutions.
- Sustainability Initiatives: The company is exploring eco-friendly manufacturing processes to reduce its carbon footprint, aligning with global efforts for sustainable semiconductor production.
- Expansion Plans: To meet growing demand, Micron is ramping up production facilities in the U.S. and Asia. This ensure a strong supply chain for its AI-driven memory solutions.
With AI adoption accelerating across various industries, Micron’s strategic moves in the memory chips sector place it at the forefront of this technological revolution. It make sure sustained growth and market leadership in the years ahead.
