Shares of Micron Technology (MU 2.92%) were surging today after the memory chip specialist posted better-than-expected results in its fiscal second-quarter earnings report and gave strong guidance due to AI-driven demand.
As a result, the stock was up 15% as of 10:45 a.m. ET.
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Micron joins the AI parade
Micron had been struggling with a cyclical downturn in chip demand and a supply glut coming out of the pandemic, but the second-quarter results confirmed that those challenges are in the past.
Revenue in the quarter jumped 58% to $5.82 billion from a year ago, which easily outpaced estimates at $5.34 billion.
Profits were also much better than expected, as Micron flipped a negative gross profit from the quarter a year ago and finished the quarter with an adjusted operating profit of $204 million, or $0.42 per share on the bottom line, which was helped by a tax benefit. That was also much better than expectations of a per-share loss of $0.25.
CEO Sanjay Mehrotra said the results were well above the company's guidance due to "excellent execution on pricing, products, and operations."
He also touted the company's momentum heading into the second half of the year, saying, "We believe Micron is one of the biggest beneficiaries in the semiconductor industry of the multi-year opportunity enabled by AI."
Can Micron stock keep gaining?
For the third quarter, Micron forecast revenue of $6.4 billion to $6.8 billion and adjusted earnings per share of $0.38 to $0.52 on a significant improvement in gross margin.
Both those forecasts were well ahead of Wall Street expectations for $6 billion in revenue and EPS of $0.20.
The numbers and the guidance make it clear that Micron is among the beneficiaries of the AI boom. As margins continue to improve, the chip stock looks likely to keep gaining.
