Micron Obliterates Wall Street's Q2 Targets On AI Data Center Business

Micron Technology (MU) late Wednesday smashed Wall Street’s targets for its fiscal second quarter and with its outlook on continued strong AI data center business. But Micron stock slipped in extended trading.

The Boise, Idaho-based memory-chip maker earned an adjusted $12.20 a share on sales of $23.86 billion in the quarter ended Feb. 26. Analysts surveyed by FactSet were expecting earnings of $9.19 a share on sales of $19.97 billion. On a year-over-year basis, Micron’s earnings rocketed 682% while sales increased 196%.

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It was the company’s fifth consecutive quarter of triple-digit percentage gains in earnings. Analysts see such gains continuing for three more quarters.

For the current quarter, Micron forecast adjusted earnings of $19.15 a share on sales of $33.5 billion. That’s based on the midpoint of its guidance. Analysts were looking for earnings of $12.03 a share on sales of $24.29 billion in the fiscal third quarter. In the same quarter last year, Micron earned an adjusted $1.91 a share on sales of $9.3 billion.

“Micron set new records across revenue, gross margin, EPS, and free cash flow in fiscal Q2, driven by a strong demand environment, tight industry supply, and our strong execution, and we expect significant records again in fiscal Q3,” Chief Executive Sanjay Mehrotra said in a news release.

He added, “In the AI era, memory has become a strategic asset for our customers, and we are investing in our global manufacturing footprint to support their growing demand. Reflecting confidence in the sustained strength of our business, our board has approved a 30% increase in our quarterly dividend.”

Micron Shares Hit All-Time High

In after-hours trading on the stock market today, Micron stock slipped more than 1% to 455. During the regular session Wednesday, Micron stock inched 4 cents higher to close at 461.73. In intraday trades, it notched a record high of 471.34.

On Tuesday, Micron stock broke out of a six-week consolidation period at a buy point of 455.50, according to MarketSurge charts. The 5% buy zone extends to 478.28, based on IBD trading guidelines.

Year to date through Wednesday’s close, Micron stock is up 62%.

Micron Stock Is On Three IBD Lists

Micron makes two main types of memory chips: DRAM and Nand. DRAM (dynamic random-access memory) chips act as the main memory in PCs, servers and other devices, working closely with central processing units. Nand flash chips provide longer-term data storage.

Micron competes with South Korea’s Samsung and SK Hynix in DRAM and Samsung, SK Hynix, Kioxia and Sandisk (SNDK) in Nand.

Lately Micron has gotten a boost from providing high-bandwidth memory (HBM), a type of DRAM, for data centers running artificial intelligence applications.

On Monday, Micron announced that it has begun volume shipments of HBM4 memory systems to support Nvidia’s (NVDA) Vera Rubin data center racks. Its current HBM4 product stacks 12 die of HBM chips for 36 gigabytes of capacity. It plans to soon expand the capacity by stacking 16 die of HBM chips for 48 gigabytes of capacity. Micron has already shipped samples of that product to potential customers.

Micron stock is on three IBD lists: IBD 50, Big Cap 20 and Tech Leaders.

Follow Patrick Seitz on X at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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