Investors in Micron Technology Inc. were in an upbeat mood today after the chipmaker posted fiscal first-quarter results that came in ahead of expectations.

The company’s guidance was better than expected too, sending its stock up higher.

The company reported a net loss for the period of $1.23 billion, down slightly from the $1.43 billion loss it recorded one year earlier. Micron’s loss per share before certain costs such as stock compensation came to 95 cents, which wasn’t as bad as Wall Street’s forecast of a $1.01 per share loss. What’s more, the company’s revenue improved from $4 billion one year earlier to $4.73 billion today, beating the Street’s target of $4.58 billion.

Micron Chief Executive Sanjay Mehrotra (pictured) said the company’s strong execution and pricing were the reasons for its better-than-expected results, and expressed confidence for the coming financial year. “We expect our business fundamentals to improve throughout 2024,” he told investors.

For the second quarter, Micron is targeting revenue of $5.3 billion at the midpoint of its range, which is well ahead of the Street’s consensus estimate of $4.97 billion.

Shares of Micron rose more than 4% after-hours, clawing back losses seen during the regular trading session earlier in the day.

Micron is a leading player in the market for memory chips. It manufactures dynamic random-access memory chips, which are used in personal computers and data center servers, as well as flash memory drives that go into smaller devices such as USBs and smartphones, and solid-state drives found in modern laptops.

The results mark a significant improvement for the company, which had previously enjoyed strong sales in the days of the COVID-19 pandemic, only to be hit hard by the economic downturn that came in its wake.

Mehrotra told analysts on a conference call that he believes the worst is now behind the company, and that he is confident that widespread interest in generative artificial intelligence will translate to a big improvement in its fortunes. He said he believes generative AI will drive a “multiyear growth phase” for the company, and is forecasting the memory chip market to see a record breaking year in 2025.

In addition, Mehrotra said that inventory levels for memory chips and storage drives have now returned to normal levels within the PC and mobile markets, meaning the company can expect an uptick in sales in the coming months.

Holger Mueller of Constellation Research Inc. said Micron delivered a strong quarter, making good progress regarding both its overall revenue growth and its profitability. He added that Micron’s management is confident AI demand will generate new growth for the company in 2024, which explains why it is no longer trying to reduce its cost base, as it had been doing in prior quarters. “Micron’s executive team deserves credit for not panicking on the cost side,” the analyst said. “It has put in place a multiyear plan that involves first returning to growth, before returning to profitability in the next fiscal year. So 2024 is the year to show it can execute on this plan.”

During the quarter, Micron revealed that it’s collaborating with the state of New York, IBM Corp. and others to build a new, $10 billion semiconductor research laboratory in Albany. The facility will house a truck-sized machine known as the Twinscan EXE:5200, which is made by the Dutch company ASML Holding N.V. and is expected to become the foundation of newer, more advanced two-nanometer chip manufacturing processes.

The company also introduced its latest SSD for PCs and workstations, called the Micron 3500, featuring its current most advanced 232-layer flash architecture.

Micron revealed as well that it’s in the final stages of qualifying its newer HBM3E memory chips that will be paired with Nvidia Corp.’s H200 AI graphics processing units in a new generation of AI servers set to launch next year.

Photo: SiliconANGLE