Micron Technology (MU) Shares Hit Record After Earnings Is It Time To Buy?

Growing core memory and storage solutions, MU of Micron Technology Stocks hit record highs today following the release of strong fiscal second-quarter results on Wednesday.

A strong revenue forecast driven by growing demand for its artificial intelligence memory cells sent Micron shares up +18% in this morning’s trading session.

Of course, investors may be wondering if it’s time to get in on the rally, as it’s worth noting that Micron’s Semiconductor Memory Industry is currently in the top 1% of the Zacks 250+ industries.

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Not your average dram

Micron has certainly entered the AI ‚Äč‚Äčrevolution as the company’s HBM3E memory cells are far more advanced than the traditional dynamic random access memory (DRAM) cells used in computers to store data. Unlike a traditional DRAM, HBM3E is applied to more specific applications such as graphics processing, high-performance computing and servers.

Designed to deliver higher bandwidth and lower power consumption, the HBM3E is being used in Nvidia’s NVDA production H200 AI GPU which has been crucial for the continued development of large language models (LLM) and other artificial intelligence tasks.

HBM3E request

Attributed to its partnership with Nvidia and high demand for HBM3E, Micron’s Dram segment sales increased 52% year-over-year to $4.15 billion compared to $2.72 billion in Q2 2023. Additionally, this in impressively beat the Zacks Estimate of $3.89 billion by 7%.

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Total quarterly sales of $5.82 billion rose 58% year over year and beat estimates of $5.33 billion by 9%. More impressively, Micron was able to post an unexpected profit of $0.42 per share versus estimates calling for an adjusted loss of -$0.27 per share. Limited by the high inflation environment in recent years, Micron’s second quarter EPS was safely up from an adjusted loss of -$1.91 per share in the comparable quarter. Notably, Micron has beaten earnings expectations in each of its last four quarterly reports.

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Impressive earnings guidance

For the fiscal third quarter, Micron expects sales of $6.6 billion which is above the current Zacks Consensus of $5.89 billion (Current Qtr.) Based on Zacks Estimates, Micron’s total sales are expected to grow 46% in fiscal 2024 to 22.67 billion compared to $15.54 billion last year. Even better, FY25 sales are forecast to grow another 48% to $33.57 billion.

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Estimates of income

Micron is currently expected to post an adjusted loss of -$0.49 per share in FY24, which would be a big improvement from -$4.45 per share in 2023. Optimistically, Micron’s annual earnings are projected to grow to $7.29 per share in FY25 with the company appearing to be ahead of the expected return on probability.

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Plus, over the past 30 days, FY24 earnings estimates have remained unchanged, but FY25 EPS revisions have risen 4%.

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Takeaway

Micron has been one of the overlooked contributors to the advancement of artificial intelligence, and its stock currently has a Zacks Rank #2 (Buy). To that extent, earnings estimates are likely to move higher in the coming weeks for Micron’s FY24 and FY25 with many analysts starting to raise their price targets following the memory chip giant’s impressive quarter results second.

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