Micron shares slide after revenue forecast fails to top estimates

• Earnings per share: 62 cents adjusted vs. 51 cents expected
• Revenue: $6.81 billion vs. $6.67 billion expected

Micron, which makes computer memory and storage, said it expects adjusted earnings per share of $1.08 on revenue of $7.6 billion in the current quarter. Analysts were expecting earnings per share of $1.05 on revenue of $7.6 billion.

The shares have more than doubled in the past year as the company rides the artificial intelligence boom. Micron’s most advanced memory is needed for AI graphics processing units (GPUs) like Nvidia’s, putting the company in position to benefit from demand for technology to train and deploy AI applications like OpenAI’s ChatGPT.

Micron reported $332 million in net income, or 30 cents per share, versus a net loss of $1.9 billion, or $1.73 per share, in the year-ago quarter.

Micron CEO Sanjay Mehrotra highlighted the company’s AI business in a statement while saying that its smartphone and PC markets remain sluggish.

Mehrotra said the company’s AI-oriented products were likely to increase in price and that the company’s data center business grew 50% on a quarter-to-quarter basis.

“Robust AI-driven demand for data center products is causing tightness on our leading-edge nodes,” Mehrotra said in a statement. “Consequently, we expect continued price increases throughout calendar 2024 despite only steady near-term demand in PCs and smartphones.”

On a call with analysts, Micron said that its high bandwidth memory, the kind used in AI chips, is sold out through 2025.

“We believe that Micron will be one of the biggest beneficiaries in the semiconductor industry in the multiyear growth opportunity driven by AI,” Mehrotra said.

WATCH: Micron CEO on CHIPS Act grant