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The
company's quarterly results on Wednesday exceeded market
expectations and it forecast a strong February quarter in a
clear sign that memory chip prices will improve next year to
recover from a months-long downturn.
Stock is either at or near normal levels for most of its
customers across personal computer, mobile, automotive and
industrial markets, Micron said, while data center inventories
will approach those levels in the first half of 2024.
"Market rebounds are happening earlier than we previously
thought," Morningstar analysts said.
Micron's upbeat results for the quarter ended Nov. 30 as well as
its forecast raised similar expectations from other chip
companies that would report early next year, lifting their
shares.
Nvidia, Advanced Micro Devices, Qualcomm, Intel and Broadcom
rose about 1% in premarket trading.
Micron also said it was in "the final stages" to qualify its
high-bandwidth memory chips for use in Nvidia's most powerful AI
platforms.
Such high-end memory chips are among Micron's most profitable
products and will draw in "several hundred million" dollars in
revenue in fiscal 2024, the company said.
Analysts expect AI-fueled demand to help Micron's rebound.
Rising demand for such chips is "likely to be a tailwind for MU
(Micron) for at least the next 2 quarters and likely longer",
Piper Sandler analysts wrote in a note.
At least three brokerages raised their price targets after
results, LSEG data showed. Micron's forward price-to-earnings
ratio is 32.45 for the next twelve months, compared to the
industry's 21.03.
(Reporting by Chavi Mehta in Bengaluru; Editing by Arun Koyyur)
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