A chipmaker is finally reaping the benefits of the AI ​​Chip Boom

• Micron surged more than 15% after strong revenue and profit forecasts driven by artificial intelligence spending.
• The chipmaker’s fourth-quarter revenue reached $7.75 billion, nearly double last year’s fourth-quarter performance.
• Other chip stocks also rose Thursday after Micron’s earnings guidance.

Micron surged more than 15% on Thursday after reporting strong revenue and profit guidance, boosted by continued spending on artificial intelligence.

The US chipmaker’s revenue in the quarter ended Aug. 29 was $7.75 billion, nearly double the same period last year. It came on the back of strong demand and pricing for its high-bandwidth memory chips.

“We enter fiscal 2025 with the best competitive positioning in Micron’s history,” Micron CEO Sanjay Mehrotra said in an earnings call on Wednesday. “With the advent of AI, we’re in the most exciting time I’ve seen for memory and storage in my career.”

He added that the company is forecasting record revenue in the final three months of 2024. Micron estimated next-quarter revenue to be between $8.5 billion and $8.9 billion, above the $8.3 billion analysts expected.

The chipmaker’s upbeat forecast is a sign that it’s another winner of the AI ​​spending boom. But that wasn’t always the case — the company reported five consecutive quarters of losses from September 2022 to November 2023 as customers like Nvidia took advantage of the AI ​​wave.

At the time, Micron was facing weak demand in the smartphone and personal computer markets — which led to oversupply, hurting its bottom line.

Micron is the first chip maker to report earnings this quarter. Its outlook was expected to spread optimism about the overall industry among investors, Wedbush analysts led by Matt Bryson wrote in a note on Thursday.

“We expect MU’s bullish outlook to be seen as positive for the memory complex and Hynix in particular given its role in HBM,” Wedbush analysts wrote.

Micron’s Asian rivals Samsung Electronics and SK Hynix, which also supply Nvidia, saw their shares rise 4 percent and 9 percent respectively in South Korea on Thursday.

Japanese semiconductor maker Tokyo Electron rose more than 6 percent on Friday.