Micron shares jump on the forecast for a quicker recovery in chip demand. Micron Technology (MU.O.) shares rose 6.3% before the bell on Thursday after it forecasted a strong 2024 memory and flash storage supply-demand balance recovery.
The company’s quarterly earnings on Wednesday exceeded market forecasts and anticipated an excellent February quarter, indicating that memory chip prices will return from a months-long decline next year.
Micron said data center stocks will attain normal levels in the first half of 2024, while most of its personal computer, mobile, automotive, and industrial clients have average stock. “Market rebounds are happening earlier than we previously thought,” Morningstar analysts stated.
Micron’s strong quarter-end earnings and projection bolstered optimism for other semiconductor makers reporting early next year, raising their shares.
Premarket gains were roughly 1% for Nvidia, AMD, Qualcomm, Intel, and Broadcom. Micron also stated it was in “the final stages” of qualifying its high-bandwidth memory chips for Nvidia’s most capable AI platforms.
Micron said its most profitable products, high-end memory chips, will generate “several hundred million” dollars in fiscal 2024.
Analysts anticipate Micron will recover from AI demand.
Piper Sandler analysts said rising chip demand is “likely to be a tailwind for MU (Micron) for at least the next 2 quarters and likely longer.”.
LSEG data indicated that three brokerages upped price targets after the results. Micron has a 12-month price-to-earnings ratio of 32.45, compared to the industry’s 21.03.
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