(Reuters) -Micron Technology forecast fourth-quarter revenue above Wall Street estimates on Wednesday, betting on robust demand for its memory chips used for artificial intelligence hardware in data centers.
Shares of the memory chipmaker rose 4.3% in extended trading.
Micron said third-quarter sales of its high-bandwidth memory chips rose 50% from the previous three months, and that it will continue to invest to meet demand.
The results and the investment plans signal rise in demand for AI chips such as those from Nvidia and Advanced Micro Devices, both of which use Micron’s memory chips.
Many cloud companies such as Google have committed large investments this year on AI infrastructure expansion, which underscores strong demand for AI-related products.
Micron is one of the three providers of high-bandwidth memory chips, besides South Korea’s SK Hynix and Samsung.
In April, Micron introduced a new business segment, called “cloud memory business unit”, which will focus on products used by hyperscalers, as well as HBM chips that help perform data-intensive AI tasks quickly.
Micron said it expects fourth-quarter revenue of $10.7 billion, plus or minus $300 million, compared with analysts’ average estimate of $9.88 billion, according to data compiled by LSEG.
The company expects an adjusted gross margin of about 42%, plus or minus 1%. Analysts on average expect an adjusted gross margin of 39.15%.
For the third quarter, Micron reported revenue of $9.30 billion, compared with estimates of $8.87 billion.
Excluding items, earnings per share stood at $1.91, above analysts’ average estimate of $1.60 per share.
(Reporting by Harshita Mary Varghese in Bengaluru and Stephen Nellis in San Francisco; Editing by Shinjini Ganguli)
Comments