Beijing, September 26 (Xinhua) -- After hours on Wednesday Eastern Time, American chip giant Micron Technology released its fourth quarter financial report for the 2024 fiscal year ending on August 29. Data shows that Micron Technology's revenue increased by 93% year-on-year to $7.75 billion, better than market expectations of $7.66 billion; Excluding certain items, the earnings per share were $1.18, better than market expectations.
Driven by this news, Micron Technology rose 14.83% after trading to $109.97. In addition, influenced by the positive financial report of Micron, ASML, Applied Materials, and Koleos rose nearly 4%, while Nvidia, AMD, Intel, TSMC, and ARM rose over 1%.
Micron Technology's Q4 revenue exceeded expectations
According to the financial report, driven by the surge in demand for storage chips brought about by artificial intelligence, Micron Technology achieved the largest increase in revenue in over a decade in the fourth quarter, with a year-on-year increase of 93% to $7.75 billion, better than market expectations of $7.66 billion; Adjusted operating profit was $1.75 billion, higher than analysts' expectations of $1.63 billion (exceeding 7.1%); Earnings per share (non GAAP) were $1.18, higher than analysts' expectations of $1.11.
Divided by business, Micron Technology's fourth quarter DRAM revenue increased by 93% year-on-year to $5.3 billion, accounting for 69% of total revenue; NAND revenue increased by 96% year-on-year to $2.4 billion, accounting for 31% of total revenue.
The high bandwidth memory (HBM) order has added a new source of revenue for the company and other chip manufacturers. This technology helps develop artificial intelligence systems that can provide faster access to massive amounts of information.
Demand has consistently outperformed supply, allowing Micron to raise prices and secure long-term, guaranteed contracts. The company announced on Wednesday that its products for 2024 and 2025 have been sold out.
Manish Bhatia, Executive Vice President of Micron, stated that Micron's advantage lies in being the first chip manufacturer to reliably provide more advanced storage in large quantities. He stated that as companies compete to enhance their artificial intelligence software and hardware, and use more storage in the process, Micron is in a favorable position.
Next quarter's performance guidance exceeds expectations across the board
In fact, Wall Street analysts remain skeptical about Micron's prospects until the release of its Q4 2024 financial report. In the past week and a half, at least seven Wall Street companies have lowered their target prices for Micron's stocks. Wall Street's concerns are mainly due to the current oversupply of memory chip inventory in the global PC and smartphone markets.
But the market expects that the rapidly developing artificial intelligence computer (AIPC) market is expected to bring more demand for storage chips, which is also beneficial for companies such as Micron.
Kinngai Chan, Senior Research Analyst at Summit Insights, stated that AIPC's DRAM demand may increase by over 30%.
Sanjay Mehrotra, CEO of Micron, wrote in a press release, "Micron's fourth quarter revenue increased by 93% year-on-year, as strong demand for artificial intelligence drove strong growth in our data center DRAM products and industry-leading HBM chips
Similarly, Sumit Sadana, Chief Commercial Officer of Micron, has stated that by 2025, each of the three product categories of HBM, high-capacity storage, and flash memory will generate billions of dollars in revenue.
It is worth noting that Micron Technology expects the median revenue forecast for the next fiscal quarter to be $8.7 billion (fluctuating by $200 million), higher than analysts' expectations of $8.21 billion; Last year, Micron's quarterly revenue was $4.73 billion; The median earnings per share (non GAAP) guidance is $1.74, higher than analysts' expectations of $1.54; Last year, Micron incurred a loss of 95 cents per share after adjustment; The expected gross profit margin (non GAAP) is 39.5%, much higher than the -10.8% in the same period last year.
The CEO of Micron stated that Micron is entering the 2025 fiscal year with the best competitive advantage in Micron's history. Micron expects its revenue to reach a historic high in the first quarter and a new high in the fiscal year 2025, with significantly improved profitability.