Micron Technology Inc., the largest U.S. maker of computer memory chips, surged in premarket trading after its quarterly sales forecast crushed Wall Street estimates, signaling that an AI-fueled growth run remains strong.
The company said revenue will be approximately $50 billion in the fiscal fourth quarter, which runs through August. Analysts estimated $43.2 billion on average. Excluding some items, profit will be about $31 a share, compared with a projection of $25.31.
For the fiscal third quarter, which ended May 28, sales rose to $41.5 billion. Earnings climbed to $25.11 a share. Analysts on average had estimated $35.7 billion in revenue and $20.49 a share in profit.
In another sign of Micron’s widening profitability, its adjusted gross margin more than doubled to 84.9% last quarter. Analysts had estimated 81.9% for that measure, the percentage of sales remaining after deducting production costs.
Micron also has secured 16 strategic customer agreements, which average three years in length. That suggests the company can mitigate the boom-and-bust cycles that have plagued the memory chip industry, said analysts.
Micron works with Nvidia Corp., the largest maker of artificial intelligence processors, to integrate its memory into AI infrastructure.
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