The Micron Technology Earnings Report: What to Expect

Key Takeaways

• Micron Technology is set to report earnings for its fiscal second quarter of 2024 on Wednesday after the closing bell.
• Micron’s revenue is expected to show growth from the previous year as well as narrowing losses in its net income and earnings per share.
• Analysts expect an increase in dynamic random access memory revenue to help narrow losses.
• The company could also provide more details about the chips it’s producing for Nvidia’s artificial intelligence graphic processing units.

Micron Technology (MU) is gearing up to announce its second-quarter earnings for the 2024 fiscal year after the bell on Wednesday. Analysts are anticipating an increase in dynamic random access memory (DRAM) revenue, which is expected to help narrow losses for the company. Additionally, investors are eager to hear more details about the chips Micron is producing for Nvidia’s (NVDA) artificial intelligence graphic processing units (GPUs).

According to estimates compiled by Visible Alpha, analysts project Micron’s revenue to come in at $5.33 billion for the second quarter of fiscal 2024. This represents an increase from both the previous quarter and the same period in 2023. With the anticipated revenue gains, the company is projected to report a loss of $275.81 million or 26 cents per share, narrowing from a loss of $2.08 billion or $1.91 per share in the same period a year earlier. These figures align with the company’s guidance for the quarter.

Key Metrics: DRAM Revenue Growth

Investors will be closely watching Micron’s DRAM revenue for the quarter, with expectations of growth in this segment. TrendForce reported that revenue across the DRAM industry saw an uptick in the fourth quarter of 2023, driven by increased stockpiling efforts and strategic production control by leading manufacturers. Micron captured 19.2% of market share during that period, positioning it as the third-largest DRAM manufacturer behind Samsung and SK Hynix.

The DRAM industry is forecasted to experience growth, with a projected near 20% increase in DRAM contract prices, according to TrendForce. Wedbush analysts project DRAM revenue for the second quarter to reach $3.9 billion, up from $3.43 billion in the previous quarter and $2.72 billion in the second quarter of 2023.

Given that nearly three-quarters (73%) of Micron’s revenue in the first quarter of 2024 came from DRAM, an increase in DRAM revenue would play a crucial role in supporting the company’s efforts to narrow losses.

Business Spotlight: Update on Memory Chip Shipments for Nvidia

Micron is expected to provide further insights into the high-bandwidth memory chips it is manufacturing for Nvidia’s AI GPUs. The company recently announced the commencement of mass production of the 24-gigabyte 8H High Bandwidth Memory 3E (HBM3E) for Nvidia, with shipments scheduled for the second quarter.

During a previous earnings call, Micron CEO Sanjay Mehrotra mentioned that the company anticipates generating “several hundred millions of dollars of HBM revenue in fiscal 2024,” with continued growth expected into 2025. Goldman Sachs analysts believe that Micron could expand its engagements with Nvidia and broaden its customer base beyond the tech giant.

Micron stands to benefit from its position within Nvidia’s AI ecosystem, as it has established itself as a key player amid the AI boom. The company’s shares have seen significant growth, with a year-to-date increase of over 13% and a nearly 65% gain over the past 12 months as of Friday’s close.

In conclusion, Micron Technology’s upcoming earnings report is highly anticipated, with investors eager to see how the company’s DRAM revenue growth and chip shipments for Nvidia’s AI GPUs will impact its financial performance. Stay tuned for updates following the release of Micron’s second-quarter results.

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