MU Posted Strong Beat and Raise, Shares Poised to Return to a 20-month High

Micron Technology Inc. (MU), a leading provider of semiconductor storage solutions, reported its financial results for Q1 of the fiscal year. Despite facing challenges, the company exceeded expectations and provided an optimistic outlook. Micron’s shares rose nearly 6% in premarket trading on Thursday.

Micron still reported a loss of $0.95 per share in Q1 FY2024, excluding one-time items, but that was $0.05 higher than the November 28 forecast. The company's revenue rose 15.7% YoY to $4.73 billion, beating the high end of its Nov. 28 forecast.

The company's improved Q1 results and positive outlook are consistent with its improving results. One of Micron Technology's major customers, NVIDIA (NVDA), reported earnings in early November.

Strong demand for AI servers in Nvidia's data center business apparently contributed as a catalyst for Micron's optimistic expectations. The company's execution and improved pricing helped the company deliver better revenue, gross margin and earnings per share above the high end of its guidance range in the reporting period. J.P. Morgan analysts, who previously assigned MU an overweight rating, raised their price target from $90 to $105, noting that high-bandwidth storage products should become “an important revenue driver in 2024 as artificial intelligence projects require more storage needs.”