Micron shares fall on outlook despite good earnings
Earnings and revenues were both better than expected at Micron Technology, but the stock fell on the outlook.
This pattern has been developing over the last quarter as companies have to admit that the trading environment is not as good as hoped. One area of specific interest is AI. Micron is currently working with NVIDIA to qualify its newest high-bandwidth memory chips for use in NVIDIA’s computing chipset. The pressure is on Micron to deliver as investors count on AI to weather a slow recovery in other end markets.
Micron Technology
The technology company Micron reported their earnings and unfortunately gave a negative outlook for their future. However, much to everyone's surprise, the numbers they released actually exceeded expectations. They reported a loss of $1.07 per share for the fourth quarter, which was better than the predicted loss of $1.18 per share. Not only that, but their revenue also surpassed estimates, reaching $4.01 billion instead of the expected $3.89 billion.
NVIDIA
The CEO of Micron, Sanjay Malhotra, also made an exciting announcement about their new high bandwidth chips. He expects the company to make several hundred million dollars in revenue from these chips next year. What's interesting is that Micron is working with another company called NVIDIA to get these chips approved for use in NVIDIA's computing chipset. This partnership could have a significant impact on Micron's success.
Micron stock price
Despite the positive earnings report, the stock price of Micron fell by 3.55% in yesterday's trading session and closed at $65.74. However, there is a silver lining for investors as the stock has received support from a trendline established earlier this year. This trendline suggests that the stock price has a strong floor at around $64.45.
For investors, it's crucial to stay informed about the market conditions. Many are relying on artificial intelligence (AI) to help them navigate the slow recovery in other markets. As for Micron , they face pressure to deliver on their high bandwidth chips and strive for positive gross margins in the second half of fiscal 2024.
Overall, while the initial outlook for Micron was disappointing, their earnings report turned out to be better than expected. The company has exciting potential with their new high bandwidth chips and their collaboration with NVIDIA. However, investors should remain cautious and keep an eye on market trends to make informed decisions.
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