(Reuters) -Chipmaker Micron Technology beat estimates for third-quarter revenue on Wednesday, driven by a surge in demand for its memory chips from the booming AI industry and improved pricing in other markets.
Shares of the Idaho-based firm still fell 7.2% in extended trading after it forecast fourth-quarter revenue largely in line with expectations. The stock had risen 13% this month, ahead of earnings, on investor optimism that Micron would benefit from AI-driven demand.
“Micron’s largely inline forecast may have been good enough two or three months ago, but is not enough to meet current lofty hopes, especially after a 67% year-to-date rally in its share price,” said Michael Schulman, chief investment officer at Running Point Capital.
The company forecast revenue of $7.6 billion, plus or minus $200 million, for the current quarter, compared with an estimate of $7.6 billion, according to LSEG data.
Micron is one of the few providers of high-bandwidth memory chips used in the most advanced AI systems, allowing it to cash in on surging demand for the semiconductors.
“We are very optimistic because after Nvidia, Micron has a bigger exposure to AI growth than perhaps any other semiconductor company,” Micron Chief Business Officer Sumit Sadana said in an interview.
The company said in March that its entire supply of HBM chips was sold out for 2024, while the majority of the 2025 production had been allocated. The chips are used in the AI processors designed by Wall Street darling Nvidia.
Micron reported revenue of $6.81 billion for the third quarter, compared with an estimate of $6.67 billion, according to LSEG data.
After Micron’s earnings, shares of Nvidia dropped 1.4%, Advanced Micro Devices were down 0.7%, and Intel slipped 0.4%.
(Reporting by Harshita Mary Varghese in Bengaluru and Max A. Cherney in San Francisco; Editing by Pooja Desai and David Gregorio)
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