June 16, 2024

Micron Tech Stock Rallies on Strong Earnings Report, Barron’s Endorsement and Positive Outlook for AI Boom

2 min read
Micron Technology Stock Sees Rise in Value Today

Micron Technology (MU 8.34%) shares were moving higher again on Monday as the memory chip specialist continued to rally off a strong earnings report. The broad market was lower, but several other AI stocks also moved higher, including Super Micro Computer and Arm Holdings, indicating that investor enthusiasm for the sector is persisting.

Micron has been up more than 23% since it reported fiscal second-quarter earnings last week that were much better than expected. It had been struggling with a secular downturn in the semiconductor sector, but last week’s report made it clear that the company is turning the page on those challenges. Revenue jumped 58% to $5.82 billion, and it reported an adjusted profit of $476 million, or $0.42 per share, well above a loss of $2.08 billion in the 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 in Barron’s over the weekend as the newsletter called it one of the best and least appreciated long-term opportunities in the AI boom. Several other AI stocks were moving higher today, including Super Micro Computer and Arm Holdings, a sign that investor enthusiasm for the sector is persisting.

Looking ahead to the fiscal third quarter, management expects the recovery to continue, calling for $6.6 billion in revenue, up 76% from the quarter a year ago. It sees gross margins improving by 24% to 27%, up from 18.5% in the second quarter, a positive sign. While much of the spoils of the early AI boom have gone to Nvidia

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