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Investing.com – Micron Technology stock (NASDAQ:MU) surged 6.5% in Tuesday’s premarket trading as a robust start to the chipmaker’s financial year led it to promise a record year of sales with “solid profitability”.
Revenue in the quarter ended December 2 jumped by a third to $7.7 billion, driven by strong demand for its memory and storage chips from a variety of clients including data centers, mobiles, graphics and automotive clients. Adjusted profit per share climbed 177% year-on-year to $2.16, easily beating estimates.
Growth of over 70% in data center revenue, in particular, more than offset a slowdown in demand from the PC market.
President and CEO Sanjay Mehrotra said 5G, Artificial Intelligence, and Electric Vehicle adoption are fueling demand growth, and the company will raise capital spending to between $11 billion and $12 billion in the current year to meet that.
The company expects the current tight supply of components to ease gradually through the year, arguing that its volume-based supply pacts and strategic agreements should help it ride out any broader market disruptions.
Micron expects revenue of around $7.5 billion in the current quarter and a gross margin of around 46%.
