AI chip demand drives Micron Technology to exceed third-quarter revenue estimates

Micron Technology, a chipmaker, exceeded third-quarter revenue estimates, driven by a rise in demand for its memory chips from the growing AI industry and improved pricing in other markets. The Idaho-based company saw its shares drop 7.2% in extended trading despite the positive earnings when it forecast fourth-quarter revenue that was largely in line with expectations. Investors had previously sent the stock up 13% before earnings, anticipating that Micron would benefit from the demand for AI-driven products. Micron projected revenue of $7.6 billion, plus or minus $200 million, for the current quarter, aligning with estimates.

As a significant player in the market for high-bandwidth memory chips used in advanced AI systems, Micron is well positioned to capitalize on the rising demand for semiconductors. Company CEO Sanjay Mehrotra highlighted that Micron is gaining share in high-margin products like High Bandwidth Memory, with the data center SSD revenue reaching a record high. This demonstrates the strength of Micron’s AI product portfolio across DRAM and NAND, contributing to its success in the market.

In March, Micron disclosed that all of its supply of HBM chips had been sold out for 2024, with the majority of the 2025 production already allocated. These chips are crucial components in the AI processors designed by the popular company Nvidia. Micron reported revenue of $6.81 billion for the third quarter, exceeding the estimated $6.67 billion according to LSEG data. After Micron’s earnings announcement, shares of Nvidia, Advanced Micro Devices, and Intel all saw declines.

Going forward, Micron remains well-positioned to benefit from the increasing demand for memory chips, supported by the growth in the AI industry and other markets. The company’s strong performance in the third quarter reflects its ability to meet market demands and deliver revenue that surpasses estimates. With a focus on high-margin products like High Bandwidth Memory and continued innovation in the AI product portfolio, Micron is set to sustain its growth and success in the semiconductor industry.