AI Surge Boosts Nvidia and Micron with Impressive Earnings

A report reveals strong earnings potential for Nvidia and Micron Technology, driven by growing artificial intelligence adoption. Micron's significant revenue increase and profitability turnaround highlight its strong market position amidst rising demand for memory chips.

Date: 03-10-2024

AI Rating: 8

The report outlines the positive impact of artificial intelligence (AI) on the semiconductor industry, particularly for Nvidia and Micron Technology. As training AI models becomes increasingly necessary for businesses, the demand for chips, specifically GPUs, is skyrocketing, positively influencing stock performance.

Micron Technology recently reported its fiscal 2024 fourth-quarter results, showing a remarkable 93% year-over-year revenue growth to $7.75 billion, surpassing expectations. This indicates a strong revenue growth trajectory during a period of heightened AI adoption. Moreover, the company returned to profitability with earnings of $1.18 per share, compared to a loss of $1.07 per share in the prior year. Analysts had forecasted earnings of $1.11 per share, showcasing an improvement beyond market expectations.

Such financial performance is essential for investors as it directly impacts Micron's stock price. Analysts predict an impressive 85% increase in revenue for the upcoming quarter, alongside an anticipated adjusted earnings per share of $1.74. These figures illustrate significant potential for continued growth in earnings and overall financial health.

In addition to Micron's strong results, the HBM (high-bandwidth memory) segment is particularly noteworthy. The company has sold out its HBM capacity for the next year and projects the HBM market to reach $25 billion by 2025, up from $4 billion last year. This rapid growth in the HBM segment highlights Micron's strategic positioning to capitalize on the expanding AI landscape.

Furthermore, the report mentions that demand for solid-state drives (SSDs) used in data centers tripled, reinforcing the idea that AI is driving demand for various memory and storage solutions. The expected annual growth rate of 60% in data-center SSDs further substantiates Micron's potential to thrive in the evolving market.

Overall, the information detailed in the report implies positive implications for stock prices of encompassing companies like Micron, given their earnings spike and prospects tied to the AI surge.

Stocks: NASDAQ:NVDA NASDAQ:MU