Micron sees revenue rise sharply due to increasing demand for AI
Driven by the massive increase in demand for AI, semiconductor company Micron has undergone a spectacular financial turnaround, with third‑quarter revenue more than quadrupling. The company reported revenue of $41.46 billion (€36.5 billion) and adjusted earnings per share of $25.11 dollars, with both figures significantly exceeding market expectations of $35.84 billion and $20.78 respectively.
The company’s growth trajectory remains steep, as Micron expects revenue in the current quarter to come in at around $50 billion (€44 billion) – a dizzying leap from the $11.3 billion (€10 billion) recorded in the same period last year.
This forecast far exceeds the $43.58 billion (€38.3 billion) expected by analysts. Such increases are attributed to a critical shortage of memory chips, as the development of AI is absorbing available production capacity, sending prices for data centres, PCs and mobile devices soaring.
To ensure future stability, Micron has concluded 16 strategic multi‑year contracts with car manufacturers and data centre providers. CEO Sanjay Mehrotra noted that these binding agreements, with a term of three to five years, are expected to account for at least half of the company’s total revenue.
CFO Mark Murphy stressed that these deals generate $22 billion (€19.4 billion) in financial commitments, giving the company the predictability it needs to scale up its investments.
Sky‑high profits
The company’s profitability has soared: the gross margin now stands at 84.9%, up from 39% a year earlier. Net profit rose to $28.24 billion (€24.8 billion), a huge increase from the $1.89 billion (€1.65 billion) reported the year before.
Because Micron’s components are crucial to the hardware produced by tech giants such as Google and Nvidia, the company’s valuation has shot up by almost 700 per cent in twelve months, pushing its market capitalisation above the $1 trillion mark.
Micron experienced explosive growth across all sectors. The data centre division was the main driver, with revenue increasing sevenfold to $11.5 billion (€10 billion), supplemented by more than $5 billion (€4.4 billion) in SSD revenue.
Cloud‑memory revenue grew by more than 300% to $13.77 billion (€12 billion). The mobile and client segment also grew by 250% to $11.52 billion (€10 billion), while revenue from automotive and embedded memory more than quadrupled to $4.63 billion (€4.1 billion).
Business AM
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