Micron Technology Inc. delivered solid profits today thanks to rampant demand for artificial intelligence chips that drove record quarterly revenue, but it wasn’t enough to move the needle in its stock price, which remained flat after-hours.

The company reported earnings before certain costs such as stock compensation of $1.91 per share, trouncing the analysts’ forecast of $1.60. Revenue for the period came to $9.3 billion, up 37% from a year ago and well ahead of the $8.9 billion analyst target.

It was an impressive performance by the chipmaker, which delivered a net profit of $1.88 billion in the quarter, up from just $332 million in the year-ago quarter.

Micron Chief Executive Sanjay Mehrotra (pictured) said the company is well on track to deliver record fiscal revenue and a bumper profit for the full year. This bodes well for the future too, he stressed, as it will allow the company to make “disciplined investments to build our technology leadership and manufacturing excellence to satisfy growing AI-driven memory demand.”

According to the CEO, the company’s record-breaking revenue was driven by “all-time-high sales” of dynamic random-access memory chips in the quarter. In particular, it saw an almost 50% sequential increase in sales of its high-bandwidth memory chips.

The company is a market leader in HBM chips that bundle numerous DRAM modules closely connected to Nvidia Corp.’s graphics processing units. They have become vital for AI computing, providing the memory those processors need to perform their computations efficiently.

Micron has been aided by the struggles of its biggest rival in the memory chip business, Samsung Electronics Co. Ltd., which has not yet been able to mass-produce HBM chips, resulting in demand for the chips outstripping supply.

“Micron isn’t the star of AI the way Nvidia is, but high-bandwidth memory chips are the gold standard for powering AI, and the demand for them is insatiable,” Rational Equity Armor Fund Portfolio Manager Joe Tigay told Bloomberg.

The chipmaker said revenue from its data center business segment more than doubled in the quarter from the previous year, while “consumer-oriented end markets” also had a boost, leading to “strong sequential growth.”

Looking to the current quarter, Micron is forecasting earnings of $2.35 to $2.65 per share for the current quarter, the midpoint ahead of the Street’s forecast of $2.47. It also forecast revenue of $10.4 billion to $11 billion, surpassing analysts’ $9.9 billion target.

The company is also likely to become even more profitable, for officials said they’re expecting an adjusted gross margin of 42% in the current quarter, up from 39% in the period just gone.

Holger Mueller of Constellation Research Inc. said the demand for HBM chips is so strong that Micron was able to deliver record revenue and, most likely, profit in the quarter without substantially increasing its cost base. Its operating income tripled compared to the same period one year earlier, while its overall sales and marketing and general and administrative costs only increased by a negligible amount.

“That is truly remarkable and resulted in Micron quintupling its profits in the quarter,” the analyst said. “But the question investors have now is how long can it keep the party going before it runs into the four challenges of rapid growth — supply issues, quality issues, sales issues and competitors catching up?”.

Micron’s stock initially gained more than 3% after the report was published, only for it to retreat. But it has been one of the top five performers in the S&P 500 over the last two months, roughly doubling since April. The intense spending on AI has sent investors scrambling to find beneficiaries of that trend beyond the likes of Nvidia.

In the year to date, Micron’s shares are up 51%, while the Nasdaq has gained 3.4%.

Photo: SiliconANGLE