tech
Micron says the AI party is far from over, but not all are celebrating
A blowout quarter for the memory maker is only lifting certain parts of the data center buildout.
TL;DR
- Micron's sales quadrupled year-over-year to $41.46 billion, exceeding analyst expectations.
- The company forecasts current-quarter revenue of about $50 billion, significantly up from $11.3 billion a year ago.
- Micron's CEO stated that AI-driven demand for DRAM and NAND 'significantly' exceeds supply and will continue to do so beyond 2027.
- Factors limiting supply include long fab construction times, skilled worker shortages, regulatory issues, and energy infrastructure needs.
- Micron is shifting towards a contract-driven model with 16 long-term agreements, providing more predictable sales.
- Companies in the memory and storage sector, along with suppliers of materials and power solutions for data centers, are immediate beneficiaries.
- Hyperscalers (Amazon, Microsoft, Alphabet, Meta) and logic chip manufacturers (Nvidia, Intel) face higher costs due to memory shortages.
- Apple's stock fell following price hikes on MacBooks and iPads, potentially impacting sales and indirectly affecting Arm Holdings.
- Qualcomm's announcement to supply data center CPUs to Meta may also influence Arm Holdings' market position.
- The article contrasts 'fortunate and able' growth companies with 'fortunate because they are able' companies, suggesting the former are currently outperforming due to AI tailwinds.