Micron's revenue forecast misses estimates, causing its stock to slide.

• Despite better-than-expected quarterly results, Micron shares dropped almost 8% on Wednesday.
• Guidance was in line with estimates.
• In the past year, the value of Micron stock has more than doubled, fueled by the growth of the artificial intelligence industry.

On Wednesday, shares dropped approximately 5% in extended trading, despite better-than-expected results, as investors focused on a revenue forecast that was in line with expectations.

The company's fiscal third-quarter performance exceeded LSEG consensus estimates for the period ended May 30.

• Earnings per share: 62 cents adjusted vs. 51 cents expected
• Revenue: $6.81 billion vs. $6.67 billion expected

Micron anticipates adjusted earnings per share of $1.08 on revenue of $7.6 billion in the current quarter, which is higher than the analysts' expectation of $1.05 on revenue of $7.6 billion.

The demand for technology to train and deploy AI applications has increased, and Micron's most advanced memory is needed for AI graphics processing units (GPUs) like NVIDIA, putting the company in a prime position to benefit from this boom.

In the current quarter, Micron reported a net income of $332 million, or 30 cents per share, in contrast to a net loss of $1.9 billion, or $1.73 per share, in the previous quarter.

Sanjay Mehrotra, CEO of Micron, emphasized the company's AI business while stating that its smartphone and PC markets are still lagging.

The company's AI-oriented products are expected to become more expensive, while the data center business experienced a 50% growth on a quarterly basis, according to Mehrotra.

""Our leading-edge nodes are experiencing tightness due to strong demand for data center products driven by AI, resulting in expected price increases throughout 2024, despite only moderate near-term demand in PCs and smartphones," Mehrotra stated."

Micron announced that its high bandwidth memory, which is utilized in AI chips, is fully sold out until 2025 during a call with analysts.

Mehrotra stated that Micron will likely benefit significantly from the growth opportunity in the semiconductor industry over the next several years, which is being driven by AI.

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