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Micron technology first-quarter earnings topped Wall Street estimates on Wednesday, betting on strong demand for its high-bandwidth memory (HBM) chips used by the AI ​​industry, sending the company’s shares up 10% after the bell.
The company is one of only three suppliers of HBM chips along with South Korea’s SK Hynix and Samsung, which has allowed the American company to capitalize on the demand for semiconductors that enable AI power generation technology.
The AI ​​boom also helped Micron overcome a memory chip glut in the PC and smartphone markets.
The company forecast revenue of $8.70 billion, including or minus $200 million, for the first quarter, compared with estimates of $8.28 billion, according to LSEG data.
Micron’s results often set the tone for the chip industry as it reports ahead of peers and serves a broad customer base that includes the PC, data center and smartphone industries.
The company said in June that its HBM chips sold out in the 2024 and 2025 calendar years. The chips used in AI processors are designed by Wall Street darling Nvidia.
Micron expects adjusted gross margin for the first quarter to be 39.5%, plus or minus 1%. Analysts had expected an adjusted gross margin of 37.7%.
In the fourth quarter, the company’s revenue jumped 93% to $7.75 billion.