Micron Technology (MU 8.34%) shares were on the rise again on Monday, as the memory chip specialist continued to rally after a strong earnings report. The company was deemed an AI winner by Barron’s, and several other AI stocks also moved higher, despite a lower broad market. As of 12:04 p.m. ET today, Micron was up 7.8%.
Since reporting its fiscal second-quarter earnings last week, Micron has been up more than 23%. It had been struggling with a secular downturn in the semiconductor sector, but last week’s report showed that the company is turning a corner. Revenue jumped 58% to $5.82 billion and it reported an adjusted profit of $476 million or $0.42 per share, well above a loss of $2.08 billion in the quarter before. CEO Sanjay Mehrotra said, “We believe Micron is one of the biggest beneficiaries in the semiconductor industry of the multi-year opportunity enabled by AI.”
What seemed to drive Micron stock higher again today was a bullish endorsement in Barron’s over the weekend as the newsletter called it one of the best and least appreciated long-term opportunities in the AI boom. Several other AI stocks were also moving higher today, including Super Micro Computer and Arm Holdings, which is a sign that investor enthusiasm for the sector is persisting.
Looking ahead to the fiscal third quarter, management expects the recovery to continue and calls for $6.6 billion in revenue, up 76% from last year’s quarter. It sees gross margins improving by 24% to 27%, up from 18.5% in Q2 – a positive sign that investors are beginning to realize that there will be multiple winners among chip stocks and Micron is shaping up to be one of them.
Jeremy Bowman has no position in any of the stocks mentioned.
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