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Memory chip maker Micron Technology Inc. posted a strong earnings and revenue beat, demonstrating that it’s still enjoying a significant boost from artificial intelligence.

Growth in sales of its highest-capacity memory products was rampant, and its stock moved higher after-hours. However, on Friday, its stock was falling more than 7% on another down day for the overall market.

The company reported second-earnings before certain costs such as stock compensation of $1.56 per share, up 42 cents from the prior year and beating Wall Street’s consensus forecast of $1.43 by a comfortable margin. Revenue for the period jumped 38%, to $8.05 billion, also beating the Street’s target of $7.9 billion.

All told, Micron’s net income grew to $1.58 billion, almost doubling from the $793 million profit it delivered in the same period last year.

Micron said its sales growth was primarily driven by its newest high-bandwidth memory chips, which have become a key component of high-end AI servers. During the quarter, sales of HBM chips surpassed the $1 billion milestone for the first time, up 50% from the prior quarter.

Micron Chief Executive Sanjay Mehrotra (pictured) hailed the company’s impressive growth in data center revenue, which tripled from the previous year. “We are extending our technology leadership…. We expect record quarterly revenue in fiscal Q3, with DRAM and NAND demand growth in both data center and consumer-oriented markets,” he added.

Micron is a leader in the market for dynamic random-access memory chips, which are used in PCs and data center servers. It also sells flash memory chips, which are found in smartphones and solid-state drives. More recently, it has become a major player in the market for HBM chips, where it competes with the likes of SK Hynix Inc. and Samsung Electronics Co. Ltd.

Looking to the next quarter, Micron offered a forecast of $1.57 per share in earnings, coming in ahead of the Street’s guidance of $1.52. In terms of revenue, it said it’s expecting to generate $8.8 billion in sales, plus or minus $200 million. That’s nicely ahead of Wall Street’s forecast of $8.47 billion in revenue.

Investors appear to be trying to understand if the company is in just another one of its endless industry cycles, where demand increases before dropping off again, or if the demand for HBM memory is more of a long-term revenue driver for the company.

With Micron’s guidance promising yet more growth, it’s likely to have strengthened investor’s confidence in the longer-term bull case, but the market remains well aware that it all rests on the industry continuing to throw money at AI. In addition, analysts have forecast DRAM sales to grow by 31% over the next six quarters.

Mehrotra told analysts on a conference call that the company has sold all of the HBM chips it has the capacity to manufacture in calendar 2025.

“We expect multibillion[-dollar] revenue in fiscal 2025,” he said. “We are seeing strong demand for our HBM supply in 2026 too, and are in discussions with customers on agreements for their calendar 2026.”

The CEO also told analysts he’s expecting personal computer sales to grow by a single-digit percentage this year. According to him, this will boost the company further as the next-generation AI PCs expected to drive that growth require substantially more memory than standard PCs.

“Micron is in the best competitive position in its history, and we are achieving shared gains across high-margin product categories in our industry,” he said.

Holger Mueller of Constellation Research Inc. said he agreed with that assessment, noting that Micron is on a roll at the moment.

“It sold over $1 billion worth of its HBM memory products in the quarter, which shows exactly where the new demand is coming from, and that has helped put Micron in a very good place,” the analyst said. “It doubled its profit and earnings per share, and there may be more to come as Micron readies its new 1-gamma DRAM node, which could help it to stretch its lead in a very key industry.”

Micron’s stock is doing better than most, having gained 22% since the start of the year, while the Nasdaq composite index is down 8% over the same time frame.

Photo: SiliconANGLE