Micron Technology Capitalizes on AI Demand, Nvidia and Other Chipmakers Feel the Squeeze

Micron Technology reported a 7.2% increase in third-quarter revenue, driven by increased demand for its memory chips from the growing AI industry and improved pricing in other markets. Despite this positive news, shares of the Idaho-based company fell 7.2% in extended trading after it provided a fourth-quarter revenue forecast that was mostly in line with expectations. Investors had raised Micron’s stock by 13% this month, anticipating that the company would benefit from AI-driven demand.

Micron’s high-bandwidth memory chips are in high demand for advanced AI systems, allowing the company to capitalize on the semiconductor market. CEO Sanjay Mehrotra expressed satisfaction with the company’s increasing market share in high-margin products like High Bandwidth Memory and record-high data center SSD revenue. Micron reported third-quarter revenue of $6.81 billion, surpassing the estimate of $6.67 billion. In March, the company stated that its supply of HBM chips was already sold out for 2024, with most of the 2025 production already allocated. These chips are essential for AI processors, particularly those designed by Nvidia.

After Micron’s positive earnings report, shares of Nvidia declined by 1.4%, Advanced Micro Devices by 0.7%, and Intel by 0.4%. The decline in Nvidia’s stock price suggests that investors may be concerned about reduced demand for its GPUs due to higher prices and increased competition from AMD and Intel. Meanwhile, Advanced Micro Devices and Intel appear to be benefiting from increased demand for their CPUs and GPUs as more consumers shift towards remote work and online learning during the COVID-19 pandemic.