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What You Need To Know Ahead of Micron Technology’s Earnings Report

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5 months ago

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What You Need To Know Ahead of Micron Technology’s Earnings Report

Key Takeaways

  • Micron Technology is set to release its third-quarter earnings report for the 2024 fiscal year after the bell on Wednesday.
  • The company is expected to report a profit for the quarter, compared to a loss in the year-ago period as revenue grows, according to analyst estimates compiled by Visible Alpha.
  • Investors will likely be watching for strong guidance driven by exposure to artificial intelligence (AI) chips.
  • Micron could also provide insights on how its ties to Nvidia could help the company.

Micron Technology (MU) is set to report its third-quarter earnings for the 2024 fiscal year after the bell on Wednesday, with investors likely watching for updates on how it stands to gain from growing demand for artificial intelligence (AI) and its partnership with AI darling Nvidia (NVDA).

Analysts project Micron’s revenue to come in at $6.7 billion for the third quarter of fiscal 2024, up from the previous quarter and year-ago period, according to estimates compiled by Visible Alpha.

Net income is expected to be $399.39 million, compared to a loss of $1.9 billion in the fiscal third quarter of 2023. Diluted earnings per share (EPS) could come in at 30 cents, up from a loss of $1.73 per share in the same period a year earlier.

  Analyst Estimates for Q3 FY 2024 Q2 FY 2024 Q3 FY 2023
Revenue $6.7 billion $5.82 billion $3.75 billion
Diluted Earnings Per Share 30 cents 71 cents ($1.73)
Net Income $399.39 million $793 million ($1.9 billion)

Key Metric: Strong Guidance on AI Exposure

Analysts at J.P. Morgan and Citi indicated they expect Micron to announce stronger-than-expected guidance for the fourth quarter, which could wow investors and drive the stock higher.

J.P. Morgan analysts said they expect “Aug-Qtr EPS will be guided higher versus consensus expectations.” The analysts added they anticipate Micron will reaffirm its view that DRAM (Dynamic Random-Access Memory) and NAND storage technology pricing will increase through 2024 into 2025 as strong high-bandwidth memory (HBM) bit shipment and pricing visibility start to extend into 2026.

Citi analysts said they “expect the company to post results and guidance above Consensus given the DRAM upturn and Micron’s increasing AI memory exposure,” projecting fourth-quarter revenue guidance to be $8 billion. The analysts also lifted their price target for the “top pick” stock to $175 from $150.

Business Spotlight: Nvidia Partnership

Micron is notably a partner of AI chipmaker Nvidia, providing the company with memory solutions for its AI chips.

The company produces high-bandwidth memory chips used in Nvidia’s AI graphic processing units (GPUs) which positions Micron to share in Nvidia’s gains.

J.P. Morgan said that Micron’s strong HBM ramp into Nvidia GPUs contributed to their expectations of strong guidance.

Micron shares have gained more than 62% since the start of the year, at $139.01 as of Monday’s close.

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