Micron Technology (MU.O) anticipates third-quarter revenue exceeding Wall Street estimates, signaling a surge in demand for its high-bandwidth memory (HBM) chips, essential components in AI models. This positive outlook, revealed on Thursday, drove the company’s shares up 2% in after-hours trading.
AI’s escalating requirements have significantly increased the need for Micron’s HBM chips. HBM, a type of dynamic random access memory (DRAM), is a crucial standard for advanced AI systems. These include processors from Nvidia (NVDA.O), a primary beneficiary of the AI boom.
“Sequential growth will continue to happen throughout calendar 2025 as we continue to ramp our capacity and market share in HBM,” said Sumit Sadana, Micron’s Chief Business Officer, according to Reuters. Sadana also mentioned that all of the company’s HBM chips are already sold out for the entirety of calendar year 2025.
Micron also offers flash memory NAND chips for the data storage market. The company anticipates DRAM and NAND demand growth in both data center and consumer-oriented markets, accompanied by substantially improved profitability in fiscal 2025, which ends in August.
“Micron’s strong forecast, exceeding analyst expectations on both revenue and earnings, underscores their pivotal role in providing the essential memory components for AI infrastructure,” commented Michael Ashley Schulman, chief investment officer at Running Point Capital.
Micron stated that its forecast does not include the potential impact of new tariffs that might be imposed by U.S. President Donald Trump. This exclusion is due to the uncertainty surrounding the timing, nature, and implementation of any such tariffs, but the company intends to pass on any incurred costs to its customers.
The company projects revenue of $8.80 billion, plus or minus $200 million, for the third quarter. This is in contrast to an estimate of $8.5 billion, based on data compiled by LSEG. Revenue for the second quarter, which ended on February 27, reached $8.05 billion, surpassing the average estimate of $7.89 billion. Excluding certain items, earnings per share were $1.56, exceeding an estimate of $1.42 per share.
