Micron Technology, Inc. reported significant growth in Q3 with revenue of $41.46 billion, representing a 346% increase from the previous year. The earnings per share (EPS) reached $25.11, surpassing analysts' expectations by over $4. CEO Sanjay Mehrotra emphasized that the memory chip shortage is structural rather than cyclical, projecting that new fabrication plants will not be operational until 2027 or 2028.
Memory Market Overview
As the demand for memory chips continues to rise, HBM3E and HBM4 memory are already sold out through 2027. Hyperscalers have committed a total of $22 billion in advance deposits to secure future supply, indicating strong market confidence. On the earnings call, Mehrotra noted that Micron has shipped over $1 billion in HBM4, a product recognized as the most complex memory to manufacture globally, with Micron being the only U.S.-based company doing so at scale.
Financial Highlights and Future Guidance
Micron's Q3 performance included a record free cash flow of $18.30 billion. Looking ahead, the company's guidance for Q4 is even more impressive, with projected revenue of $50 billion and gross margins anticipated to approach 86%. EPS is expected to hit $31.00, showcasing the company's robust financial outlook.
Despite trading near $970, down from a 52-week high of $1,255, the stock is still up approximately 244% year-to-date. Cramer pointed out that this valuation is under eight times earnings, suggesting a strong investment potential.
Commitment to U.S. Manufacturing
Micron is investing $200 billion into U.S. manufacturing and research and development, aiming to create over 90,000 jobs in the process. An additional $300 million will be allocated to developing a domestic semiconductor talent pipeline, indicating Micron's commitment to strengthening the semiconductor landscape in the United States.
