On Monday, Micron Technology (MU 8.34%) shares saw another rise as the company continued to rally from its strong earnings report. Despite a decline in the broader market, several other AI stocks also moved higher, indicating investor enthusiasm for the sector. As of 12:04 p.m. ET today, Micron was up 7.8%.
Micron has seen remarkable growth since it reported its fiscal second-quarter earnings last week, which were much better than expected. The company had been struggling with a secular downturn in the semiconductor industry but has now turned a corner with last week’s report. Revenue increased by 58% to $5.82 billion and reported an adjusted profit of $476 million or $0.42 per share, well above a loss of $2.08 billion in the previous quarter. CEO Sanjay Mehrotra said, “We believe Micron is one of the biggest beneficiaries in the semiconductor industry of the multi-year opportunity enabled by AI.”
The bullish endorsement from Barron’s over the weekend likely contributed to Micron’s stock price increase again today as it called it one of the best and least appreciated long-term opportunities in the AI boom. Other AI stocks like Super Micro Computer and Arm Holdings also moved higher, indicating investor confidence in the sector’s potential for continued growth.
Looking ahead to the fiscal third quarter, management expects recovery to continue and anticipates revenue of $6.6 billion, up 76% from last year’s quarter, with gross margins improving by 24% to 27%, compared to 18.5% in Q2 – a positive sign for investors who are starting to see that there will be multiple winners among chip stocks rather than just Nvidia taking all the spoils of early AI boom successes.
Jeremy Bowman has no position in any of these companies mentioned here; however, The Motley Fool recommends Nvidia and has disclosure policies that can be found on their website
