Micron to report third quarter earnings amid sky-high demand from data centers
Micron (MU) will report its third quarter earnings after the bell on Wednesday because the reminiscence trade continues to see tailwinds from the worldwide AI build-out.
Micron inventory has soared a staggering 862% over the previous 12 months and is up 316% since January. Rival reminiscence maker SK Hynix (000660.KS) have seen related inventory motion, with shares rocketing 1,035% greater over the previous 12 months and 348% 12 months to date.
Those sorts of huge good points have raised considerations amongst some analysts and traders, however AI bulls say the proof is within the earnings numbers.
For Q3, Micron is anticipated to report earnings per share (EPS) of $20.39 on income of $35.5 billion, based mostly on Bloomberg analyst consensus estimates. That would work out to a 967% year-over-year EPS improve from the $1.91 the corporate reported in Q3 final 12 months.
Revenue would soar 281% from 9.3 billion within the year-ago quarter.
DRAM income is projected to climb 288% to $27.5 billion, whereas NAND, additionally referred to as storage, income is anticipated to hit $7.7 billion, a 256% enchancment.
Micron’s adjusted gross margins may additionally hit 81.83%, up 110% 12 months over 12 months.
The earnings report comes after Micron and Anthropic (ANTH.PVT) announced a strategic agreement beneath which Micron will provide Anthropic with its reminiscence and storage chips. Micron can even make investments an undisclosed sum in Anthropic. Such offers have been criticized as a type of round investing that will increase interdependencies between varied AI firms.
Data middle building is driving immense demand for each reminiscence (DRAM) and storage (NAND) chips.
DRAM is a crucial element in AI servers, serving as a sort of holding place for vital data that GPUs and CPUs want to entry rapidly. Data that is not obligatory for fast use is saved in NAND reminiscence.
DRAM is used to construct high-bandwidth reminiscence, or HBM, which is the reminiscence utilized in AI data centers. But it is also used to produce DDR RAM, present in the whole lot from your smartphone and laptop computer to online game consoles.
The unimaginable demand from deep-pocketed data middle builders, nevertheless, has put strain on electronics producers, who’re battling to get their share of reminiscence and storage chips for his or her units.
Video recreation consoles had been among the many first to take it on the chin, with Sony (SONY), Microsoft (MSFT), and nintendo (NTDOY) every elevating the costs of their programs. But the reminiscence shortage-induced worth will increase have since unfold throughout the buyer know-how area.
Apple (AAPL) has already stated it should have to increase costs on a few of its units due to the scarcity and can seemingly take successful to its margins in the coming quarters.
Industry analysts have additionally warned that laptop computer and smartphone gross sales may decline within the months forward as customers balk at greater costs.
