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What’s happening: Shares of Micron Technology gained on Thursday, after the company released results for its fiscal fourth quarter.
What happened: The largest US maker of computer memory chips reported better-than-expected sales and earnings for the latest quarter.
Micron also issued a strong revenue outlook, which took its stock to the highest in around 13 years.
How were the results: The Boise, Idaho-based company reported its strongest quarterly revenue growth in a decade for the latest quarter.
Why it matters: The company saw strong demand for its memory chips that are used in AI solutions. The recent boom in AI spending helped Micron offset inventory buildups in the personal computer market.
Micron has also been able to increase prices and attain long-term contracts due to the AI boom. The company said its HBM chips are already sold out for the current and next calendar years.
Its operating cash flow grew to $3.41 billion, from $2.48 billion in the previous quarter and significantly higher than the $249 million in the year-ago period. The company closed the latest quarter with cash, marketable investments and restricted cash worth $9.16 billion.
“Micron delivered 93% year-over-year revenue growth in fiscal Q4, as robust AI demand drove a strong ramp of our data center DRAM products and our industry-leading high bandwidth memory. Our NAND revenue record was led by data center SSD sales, which exceeded $1 billion in quarterly revenue for the first time,” CEO Sanjay Mehrotra said.
The company’s board declared a quarterly cash dividend of 11.5 cents per share, payable on October 23 to shareholders of record as of October 7.
Management guided to revenues of $8.7 billion, plus or minus $200 million, for the fiscal first quarter, higher than market estimates of $8.28 billion. They also projected adjusted earnings of $1.74 per share, plus or minus 8 cents per share, versus expectations of $1.65 per share.
How shares responded: Micron’s shares jumped 14.7% to close at $109.88 on Thursday, following the release of quarterly results. The stock has gained more than 33% year to date.
What to watch: Investors will continue monitoring demand for memory chips used in AI computing, which is expected to provide a significant boost to the company’s overall results ahead.
Context: The EUR/USD forex pair moved higher on Thursday, as investors assessed the latest economic reports.
Details: Data released on Thursday showed bank lending to households in the Eurozone rose by 0.6% year-over-year to €6.891 trillion in August, faster than the 0.5% rise recorded in the previous month. Loans to non-financial corporations gained 0.8% year-over-year to €5.132 trillion in August, compared to a 0.6% rise in July.
Meanwhile, there are speculations over China’s government looking to issue 2 trillion yuan of special sovereign bonds this year, after announcing several economic stimulus measures earlier this week, including cutting its key lending rates. The news led to an improvement in market risk sentiment.
Weakness in the US dollar also lent support to the EUR/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, declined around 0.4% to 100.52 on Thursday.
The EUR/USD pair gained around 0.4% to 1.1178 on Thursday. The STOXX Europe 600 Index climbed 1.25% to reach a new record high 525.61 during the session, with a rise in shares of companies that have high exposure to China.
What to watch: Investors await the release of economic data on economic sentiment indicator, consumer confidence indicator and services sentiment indicator from the Eurozone today. Eurozone’s economic sentiment indicator, which rose to 96.6 in August, is expected to edge lower to 96.5 in September.
Analysts expect Eurozone’s consumer confidence indicator to increase by 0.5 points to a reading of -12.9 in September, while services sentiment indicator is projected to decline to 5.6, from 6.3 in August.
Other Markets: US trading indices closed higher on Thursday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 0.62%, 0.40% and 0.72%, respectively.
US President Joe Biden announced new military aid worth $8 billion to help Ukraine in its ongoing war with Russia. The news sent the safe-haven US dollar index higher in forex trading this morning.
Taiwan’s consumer confidence index rose to 77.84 in September, from 77.75 in August. Consumer confidence surging to the highest level since March 2020 lent support to the TWD/USD forex pair.
China’s industrial profits grew by 0.5% year-over-year to 4,652.73 billion yuan during the first eight months of the year. This being a significant deceleration from the 3.6% growth recorded in the previous period sent the CNY/USD pair lower in forex trading this morning.
South Korea’s Business Survey Index for the manufacturing sector declined to 69 in September, from 71 in August. The region’s business morale declining to the lowest level since October 2023 exerted pressure on the KRW/USD forex pair.
The Bank of Mexico slashed its benchmark interest rate to 10.50% at its latest meeting, sending the MXN/USD pair lower in forex trading this morning.
France’s inflation rate and producer price inflation, Spain’s GDP growth rate, business confidence, consumer price index, Turkey’s balance of trade and economic confidence index, Germany’s unemployed persons, number of unemployed individuals and jobless rate, Italy’s industry sales and producer price inflation, Eurozone’s consumer confidence price trends over next 12 months, industrial sentiment and selling price expectations, UK’s CBI distributive trades, Canada’s CFIB’s business barometer, GDP growth rate and government budget value, India’s foreign exchange reserves, Brazil’s unemployment rate, Mexico’s balance of trade, as well as US core PCE price index, personal income, personal spending, goods trade balance, University of Michigan consumer sentiment, Baker Hughes crude oil rigs and Baker Hughes total rigs.
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