On Thursday, Micron Technology stated its successful third-quarter financial results, which led to a rally in the share of Asian chipmakers.
Its stock price went up by 0.42% to $67.07 per share on June 28. Likewise, it is expected to rise by 3.01% to $69.09 apiece in the upcoming session.
The company’s earnings per share increased to -$1.43, beating analysts’ -$1.59 forecast. As a result, it is higher than the previous -$1.91 data.
Moreover, its revenue improved to $3.75 billion, topping the $3.67 billion estimates. Therefore, the latest reading jumped from the prior $3.69 billion figures.
The newest financial data from Micron highlighted the easing of the sector’s supply glut. According to the CEO of Micron, Sanjay Mehrotra, they anticipate improving their supply and demand balance.
On the other hand, he added that their chips ban in China is still a major problem that affects their outlook. Also, it is causing a slowdown in their recovery.
Last month, authorities from the Asian nation stated that products from Micron failed its security review. Furthermore, they declared that the firm is a significant security risk to their country’s vital information infrastructure.
However, Mehrotra mentioned they have higher confidence for the industry to surpass the bottom for quarterly revenue and growth.
AI Growth Boosts Micron Chips Demand
The fast-growing artificial intelligence (AI) sector powered the demand for Micron Technology. It increased requests for their memory chips.
According to the CEO, the adoption of generative AI is boosting industry demand at higher-than-anticipated levels. However, traditional server demand remains dull for mainstream data center applications.
He added that Micron customers continue to decrease excess storage for better pricing trends. After higher demand during the pandemic, consumer spending on devices like smartphones and personal computers dipped. As a result, it pulled down prices, causing a higher stack in inventories.
Based on analysts, the memory industry correction is now in the past. Moreover, the call for PCs, phones, and servers is anticipated to stay mixed in the year’s second half.