Can we all just take a moment to marvel at the audacity of Micron Technology (MU.O)? I mean, really, it’s like watching an over-caffeinated gymnast stick a perfect landing. They’re just showing off now. Despite the tumultuous times we are experiencing, Micron’s managed to nail their third-quarter revenue, sending shares up 3% in post-market trading. Oh, and did I mention they’ve already swelled a pretty 34% this year?
Sanjay Mehrotra, the guy with the captain’s hat at Micron, credits this success to their customers’ somewhat obsessive compulsion to trim their excessive inventories, especially in the PC and smartphone arena. No hoarders here, folks, just neat freaks and better pricing trends.
Riding the AI Wave
Now let’s dive a bit deeper. The real MVP (Most Valuable Player) here is the insatiable AI sector. The new celebrity in town, generative AI, has been bringing home the bacon amid the traditional market’s sluggishness. If you’ve been living under a rock, the new “it thing” is OpenAI’s ChatGPT, and boy, the investors are swooning.
The implications of the AI surge are twofold. First, we’re about to witness an onslaught of data hunger, the likes of which we’ve never seen before. And what’s the dessert after a hefty data meal? You guessed it: storage chips. More data equals more chips, and more chips equals more cha-ching for Micron.
The U.S.-China Tech Tango
If that was the good news, here’s the prickly bit. The ongoing U.S.-China tech tussle is sending ripples through the chipmaking world. Last month, Micron got a solid thumbs down from China’s cyberspace regulator, which is pretty much the equivalent of being ghosted on your favourite dating app. No love for Micron there.
This little speed bump means that Micron might see a hit on its China-based revenue. When I say “a hit,” we’re talking about half of its revenue from Chinese firms, or a decent chunk of its total revenue.
Looking Ahead
Now what? Well, for starters, Micron’s forecasting about $3.9 billion for the next quarter. Business as usual, despite a reported net loss of a cool $1.9 billion. All things considered, Micron is staying in the game, just like that gymnast, making difficult maneuvers look easy.
Sure, the road ahead is full of uncertainty. But with AI on the rise and plenty of chips to go around, Micron might just be able to stick another landing.
