Micron meets, Market wants More: Stock Tumbles !
Tue, 25 June 2024.
A days ago. I wrote a post on $Micron Technology(MU)$ and its forthcoming quarterly earnings results. Click here ! to read about it and repost.
Wall Street expected its earnings to be above forecasts and MU did not disappoint.
The results were released last evening after the bell, below are the details.
Earnings vs LSEG forecast.
Earnings per share: 62 cents adjusted vs. 51 cents expected
Revenue: $6.81 billion vs. $6.67 billion expected
Outlook.
Micron said it expects:
Earnings per share (adjusted): $1.08 adjusted vs $1.05 forecast.
Revenue: $7.6 billion for current quarter. Analysts were expecting revenue of $7.6 billion.
Net income: $332 million vs -$1.9 billion YoY.
And just like that, Micron shares fell -7% after the bell. This is because investors chose to focus on a revenue (instead) that was in line with estimates.
Micron’s shares (computer memory & storage maker) have more than doubled in the past year as the company rides the artificial intelligence boom. (see above)
Micron’s most advanced memory is needed for AI graphics processing units (GPUs) like $NVIDIA Corp(NVDA)$.
This put Micron Technology in position to benefit from demand for technology to train and deploy AI applications like OpenAI’s ChatGPT.
In a statement, Micron CEO Sanjay Mehrotra has mentioned:
Its smartphone and PC markets, however remain sluggish.
Company’s AI-oriented products were likely to increase in price.
Company’s data center business grew +50% on a QoQ basis. In fact, robust AI-driven demand for data center products is causing tightness on MU’s leading-edge nodes.
Its high bandwidth memory (HBM), used in AI chips, is sold out through 2025
Micron will be one of the biggest beneficiaries in the semiconductor industry in the multiyear growth opportunity driven largely by AI.
Million dollar question
MU Cont’d To Fall Today?
Looking at MU’s future price, when market opens it will fall another -4.47%.
Nvidia’s past few days’ consolidation will be the “hidden” catalyst exerting pressure on all semiconductors and semiconductor-related stocks.
If Friday, 28 Jun 2024 - US’s May 2024 personal consumption expenditure (PCE) data shows that inflation is cooling, it might just be the impetus required to turn things around.
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