{"id":269993,"date":"2024-06-28T09:35:13","date_gmt":"2024-06-28T09:35:13","guid":{"rendered":"https:\/\/www.techopedia.com\/?post_type=news&p=269993"},"modified":"2024-06-28T09:35:13","modified_gmt":"2024-06-28T09:35:13","slug":"micron-shares-nosedive-despite-beating-revenue-estimates","status":"publish","type":"news","link":"https:\/\/www.techopedia.com\/news\/micron-shares-nosedive-despite-beating-revenue-estimates","title":{"rendered":"Micron Shares Nosedive Despite Beating Revenue Estimates"},"content":{"rendered":"
Micron Technology\u2019s share price has fallen 7.2% in extended trading after its earnings report, just after Nvidia\u2019s stock saw a similar drop.\u00a0<\/b><\/p>\n
That is despite exceeding estimates for Q3 revenue. The strong performance was fuelled by continuing demand for its memory chips. Still, investors appear to have been spooked by the immediate forecast.\u00a0<\/span><\/p>\n It could also point to an ongoing trend in the market, raising questions about the stability of AI investments.\u00a0<\/span><\/p>\n Micron\u2019s stock had risen 13% this month. The drop in price has been attributed to a weaker-than-expected outlook for the current period.\u00a0<\/span><\/p>\n The Idaho-based semiconductor manufacturer has set adjusted earnings per share of $1.08 against revenue of $7.6 billion in this quarter. Some analysts indicated earnings per share worth $1.05 on revenue of $7.6 billion.\u00a0<\/span><\/p>\n The company\u2019s CEO, Sanjay Mehrotra, discussed the continued prospects of its AI operations while noting the modest market conditions facing its smartphones and PC interests.\u00a0<\/span><\/p>\n Mehrotra intimated that Micron\u2019s AI-focused offerings would likely increase in price due to \u201crobust demand for data center products.\u201d He also added on a call with analysts that its high-bandwidth memory, used in advanced chips, is fully subscribed through 2025.<\/span><\/p>\n This varied market performance follows the highly volatile example of Nvidia in recent days. The leading global supplier of AI chips went from the high of becoming the <\/span>world\u2019s most valuable company<\/span><\/a> on June 18 to the low of suffering the <\/span>largest three-day loss ever recorded<\/span><\/a> on the stock market.\u00a0<\/span><\/p>\n Nvidia was sitting pretty with shares at $136, delivering a valuation of $3.34 trillion. Still, within three days, the tech heavyweight had lost 13% of its value, worth a staggering $646 billion.\u00a0<\/span><\/p>\n The situation has led to questions of a potential overvaluation of the chip maker but in a wider context, it points to market concerns on the stability of AI investments.\u00a0<\/span><\/p>\nAI Market Concerns<\/span><\/h2>\n