Micron Technology (MU) Stock Fell 6.3% on Q4 and FY ’23 Results

The Micron Technology Inc (NASDAQ: MU) stock price fell 6.26% after announcing its Q4 and FY2023 results that ended on August 31, 2023. The company reported a wider first-quarter loss forecast, but its earnings report had some positive aspects.

Micron's first-quarter revenue forecast surpassed Wall Street expectations, driven primarily by the rising demand for memory chips within the artificial intelligence (AI) sector. This demand for high-performance memory chips, often led by Nvidia supplier SK Hynix, has buoyed investor confidence in Micron's ability to endure a sluggish recovery in other markets.

One notable development in Micron's strategy is its partnership with Nvidia, the world's most valuable chip company. The collaboration involves the qualification of Micron's latest high-bandwidth memory chips for use in Nvidia's computing chips. 

The venture into high-bandwidth memory chips represents a shift for Micron, as it opted to forego the current generation of such chips in favour of positioning itself as a provider of higher-performing chips starting next year.

Sumit Sadana, Chief Business Officer at Micron, emphasised the impressive capabilities of their new chips, stating that they outperformed competitors' samples in various aspects. Notably, the chips have significantly lower power consumption while delivering superior performance. 

So many of its customers found it hard to believe how great the new chips were until they tested them. Micron anticipates substantial revenue—measured in the “several hundred million” dollars range—from these high-bandwidth chips in the coming year.

While the company's revenue outlook for the current quarter, with an estimated $4.40 billion, displayed strength and exceeded forecasts, the news of an adjusted loss per share of $1.07—higher than the anticipated 95 cents per share loss—caused concern among investors.

Micron Technology President and CEO Sanjay Mehrotra said: “During fiscal 2023, amid a challenging environment for the memory and storage industry, Micron sustained technology leadership, launched a significant number of leading-edge products, and took decisive actions on supply and cost. Our 2023 performance positions us well as a market recovery takes shape in 2024, driven by increasing demand and disciplined supply. We look forward to record industry TAM revenue in 2025 as AI proliferates from the data centre to the edge.”

Micron Technology (MU) stock price. 

The Micron Technology (MU) stock price fell 6.26% to trade at $63.94, from Wednesday’s closing price of $68.21.