Micron beats estimate amid AI-driven memory demand

Investing.com -- Micron Technology beat quarterly estimates and issued sharply higher guidance amid surge in memory demand due to artificial intelligence. Shares of the memory chipmaker were up about 2% in extended trading.

“In the AI era, memory has become a strategic asset for our customers, and we are investing in our global manufacturing footprint to support their growing demand. Reflecting confidence in the sustained strength of our business, our board has approved a 30% increase in our quarterly dividend.” said CEO Sanjay Mehrotra.

The chipmaker reported fiscal second-quarter adjusted earnings of $12.20 per share, well above analysts’ estimates of $8.79. Revenue rose to $23.86 billion from expectations of $19.19 billion.

Operating cash flow climbed to $11.90 billion, reflecting strong pricing and demand conditions. The board also approved a ⁠30% increase to ‌its quarterly ​dividend.

Micron projected further gains in the current quarter, forecasting earnings of $19.15 per share, nearly double consensus estimates of $10.57.

It expects revenue of $32.75 billion to $34.25 billion, also far ahead of estimates of $22.53 billion.

The robust outlook is supported by tight supply and rising prices across memory markets, driven by demand from data centers and AI-related workloads.

Industry pricing trends remain strong, with DRAM and NAND prices expected to post steep increases this year, supported by hyperscaler spending and enterprise demand. Recent pricing data suggests further upside, with DRAM spot prices rising sharply since the start of the year and trading above contract levels, indicating continued momentum.

Micron shares have surged 358% over the past year, supported by the sharp upcycle in memory pricing and demand, while supply remains constrained despite increased investment across the industry.

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