Investing.com – Micron (NASDAQ:) shares fell in U.S. pre-market trading after the U.S. chipmaker released financial guidance for the current quarter that disappointed investors’ sky-high expectations fueled by a surge in enthusiasm for artificial intelligence.
Idaho-based Micron said it expects to generate revenue of $7.6 billion, give or take $200 million, in its fiscal fourth quarter, roughly in line with estimates of $7.6 billion, according to LSEG data cited by Reuters. For the three months ended May 30, Micron reported revenue of $6.81 billion, compared with estimates of $6.66 billion.
Analysts noted that they need stricter guidance from the company, making high-bandwidth memory chips potential candidates for training large language models that power artificial intelligence applications. Micron has benefited greatly from the recent artificial intelligence craze, with its shares more than doubling in value over the past year.
“[E]Expectations were clearly raised ahead of Wednesday’s report,” Stifel analysts said in a note to clients.
In the earnings call, Micron CEO Sanjay Mehrotra also said the group expects a “significant” increase in capital spending in fiscal 2025 to help support HBM assembly and testing. Micron expects spending to be about $8 billion in 2024.
Mehrotra added that its HBM chips, which power cutting-edge processors developed by artificial intelligence darling Nvidia (NASDAQ:), were “sold out” for calendar years 2024 and 2025.
The fall in Micron’s stock price led to declines in shares of semiconductor companies such as Nvidia, Advanced Micro Devices (NASDAQ:) and Intel (NASDAQ:).
JPMorgan analysts said in a note that they had “no panic” about Micron’s results, arguing that Wall Street’s “positioning” was “too high.”
Yasin Ebrahim contributed to this report.