Micron Tech Beats Revenue Estimates on AI Chip Demand; Shares Fall Post-Rally
Supraja
Micron Technology (MU.O) announced its third-quarter earnings projections on Wednesday, with strong sales of its memory chips leading to optimistic expectations.
Its earnings outlook for the current quarter fell short of investor hopes, who had been positive about the company's prospects during the chip industry's AI surge.
As a result, Micron's stock dropped by 7.2% during the extended trading session after it projected fourth-quarter earnings that were close to market expectations.
The stock had seen a 13% increase this month, driven by investor confidence that Micron would profit from the demand for chips in artificial intelligence.
"Micron's revised forecast might have been acceptable a few months back, but it falls short of the high expectations, particularly after its share price has surged by 67% in the last year," said Michael Schulman, the CIO at Running Point Capital.