Micron tumbles as AI revenue surge falls short of lofty expectations
The Hindu
Micron's stock drops 6% as revenue forecast disappoints, despite strong AI chip demand, impacting tech market expectations.
Micron shares dropped 6% in premarket trading on Thursday after the chipmaker's current-quarter revenue forecast failed to impress investors looking for outsized results powered by the AI demand surge.
The chipmaker forecast fourth-quarter revenue of $7.6 billion, plus or minus $200 million, in line with analysts' average estimate even as the company said it had "sold out" its high-bandwidth memory (HBM) chips for this year and the next.
Micron is one of the few providers of HBM chips that power the world's most advanced AI systems, allowing the company to cash in on surging demand for semiconductors and driving up its stock 67% so far this year.
"Anything less than fantastic is not good enough when your share price got multiplied by three in just about 18 months," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank in a note.
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The chipmaker is set to lose $10 billion at current share price levels of $133.25. Peers Nvidia, Broadcom , Intel and Qualcomm were also down 0.2-2% in premarket trading.
"The market reaction underscores the high expectations for every company that is part of the AI ecosystem," said analysts at Saxo Bank.
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