(Reuters) – Chip maker Micron Technology Inc said on Wednesday its third-quarter sales beat expectations, helped by surging demand for memory chips from the fast-growing artificial intelligence (AI) industry and higher prices in other markets.
But the Idaho-based company's shares fell 7.2% in after-hours trading after fourth-quarter sales were roughly in line with expectations. Investors had rallied the stock 13% this month ahead of the earnings report on optimism that Micron would benefit from demand for AI.
The company now expects sales of $7.6 billion for the quarter, plus or minus $200 million, beating expectations of $7.6 billion, according to LSEG data.
Micron is one of the few companies that provides the high-bandwidth memory chips used in cutting-edge AI systems and is well positioned to benefit from surging demand for semiconductors.
“We gained share in higher margin products like high-bandwidth memory, our datacenter SSD revenue reached an all-time high and demonstrated the strength of our AI product portfolio across DRAM and NAND,” Micron CEO Sanjay Mehrotra said.
The company said in March that it had sold out its entire supply of HBM chips for 2024 and had allocated most of its production for 2025. The chips are used in AI processors designed by Wall Street darling Nvidia.
Micron reported third-quarter sales of $6.81 billion, beating expectations of $6.67 billion, according to LSEG data.
After Micron's earnings report, Nvidia shares fell 1.4%, Advanced Micro Devices fell 0.7% and Intel fell 0.4%.
(Reporting by Harshita Mary Varghese in Bengaluru and Max A. Charney in San Francisco; Editing by Pooja Desai)
