Micron Technology Surges After Strong Earnings Report and Barron’s Endorsement: What Does It Mean for the AI Boom?

Micron Technology Stock Sees Rise in Value Today

On Monday, shares of Micron Technology (MU 8.34%) were rising again, as the memory chip specialist continued to rally off a strong earnings report. Barron’s deemed it an AI winner, and several other AI stocks also moved higher that day, despite the broader market being lower. As of 12:04 p.m. ET today, Micron was up 7.8%.

Micron had been struggling with a secular downturn in the semiconductor sector for some time now, but last week’s earnings report made it clear that the company was turning the page on those challenges. Revenue jumped by 58% to $5.82 billion, and it reported an adjusted profit of $476 million, or $0.42 per share, much better than expected and a stark contrast to the loss of $2.08 billion in the same quarter a year ago. CEO Sanjay Mehrotra said, “We believe Micron is one of the biggest beneficiaries in the semiconductor industry of the multi-year opportunity enabled by AI.”

What seemed to drive Micron stock higher again today was a bullish endorsement from Barron’s over the weekend that called it one of the best and least appreciated long-term opportunities in the AI boom. Several other AI stocks were also moving higher that day, including Super Micro Computer and Arm Holdings, indicating investor enthusiasm for the sector was persisting.

Looking ahead to the fiscal third quarter, management expects recovery to continue and has forecasted $6.6 billion in revenue, up 76% from Q3 last year. They anticipate gross margins improving by 24% to 27%, up from 18.5% in Q2 – a positive sign for investors who are starting to realize there will be multiple winners among chip stocks instead of just Nvidia taking all spoils during early AI boom era.

Jeremy Bowman has no position in any of these companies mentioned here.

The Motley Fool has positions in and recommends Nvidia.

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