Micron Technology, Inc., MU saw a significant drop of 5.47% in its shares during pre-market trading on Thursday, following the release of its third-quarter earnings report. Despite the decline, the company surpassed expectations from analysts in terms of both revenue and earnings per share (EPS). Micron reported revenue of $6.81 billion, exceeding the consensus estimate of $6.634 billion, and an adjusted EPS of $0.62, beating analyst estimates of $0.49.
While Micron delivered strong results for the third quarter, investors seemed to focus on the company’s fourth-quarter revenue forecast, leading to the recent sell-off. Micron projected an adjusted EPS of $1.08 on $7.6 billion in revenue for the upcoming quarter, slightly higher than what analysts had anticipated. Gene Munster from Deepwater Asset Management emphasized that despite the stock sell-off, Micron’s artificial intelligence (AI) initiatives remain promising, especially with anticipated growth in High Bandwidth Memory (HBM) revenue.
In a strategic move to capitalize on the growing demand from the AI industry, Micron had previously announced plans to expand its HBM chip production in the U.S. and potentially in Malaysia. This expansion aligns with the broader support provided by initiatives like the CHIPS Act, which aims to bolster the competitive advantage of U.S. companies in the global chip market with significant incentives.
Overall, while the recent drop in Micron’s stock price may have raised concerns among investors, the company’s strong performance in revenue and EPS, coupled with its strategic focus on AI and chip market expansion, could position it well for future growth and success.