During Thursday’s pre-market trading, shares of Micron Technology, Inc., MU dropped by 5.47%, despite the company’s third-quarter earnings disclosure that exceeded analyst estimates for both revenue and earnings per share (EPS). The company reported a revenue of $6.81 billion, surpassing the consensus estimate of $6.634 billion, and an adjusted EPS of $0.62, beating analyst expectations of $0.49.
Despite this drop, Gene Munster from Deepwater Asset Management believes that Micron’s AI story remains intact. He highlighted that Micron’s High Bandwidth Memory (HBM) revenue, representing 2% of total revenue, was lower in previous quarters but predicted a 10-15% increase in HBM revenue for the next year, reinforcing the strength of the AI trade. In June, there were reports that Micron was planning to expand its HBM chip production in the U.S., which aligns with the potential benefits it may gain from the CHIPS Act, which provides significant incentives from the U.S government to enhance their competitive advantage in the global chip market.
However, this recent sell-off may have been influenced by investors focusing on the fourth-quarter revenue forecast rather than the strong third-quarter results as reported by CNBC. Micron anticipates an adjusted EPS of $1