Micron Technology jumps 6.5% after beating top and bottom-line analyst estimates, posting positive outlook

Micron HQ
Micron Technology HQ in Boise, Idaho.

Micron Technology jumped as much as 6.5% on Thursday after beating top and bottom-line analyst estimates and posting a positive outlook in its fiscal second-quarter earnings release.

The Boise, Idaho-based memory and storage solutions provider posted non-GAAP net income of $1.13 billion which equates to earning per share of $0.98. The figure topped consensus estimates by $0.03.

Micron also saw revenues jump 30% from $4.8 billion for the same period last year to $6.24 billion in its fiscal second-quarter results, topping analysts’ consensus estimates of $6.21 billion.

Operating cash flow of $3.06 billion was strong in comparison to the $1.97 billion for the prior quarter and $2 billion for the same period last year as well.

Micron stock traded up 5% at $92.61 as of 11:33 a.m. ET on Thursday, having hit a session high at $94.38 earlier.

The company guided for revenue of between $6.9 billion and $7.3 billion in the upcoming fiscal third quarter. That’s compared to $5.44 billion from the same period a year ago. Gross margins are expected to be 41.5% with GAAP Diluted EPS hitting $1.52.

“Micron’s strong fiscal second-quarter performance reflects rapidly improving market conditions and continued solid execution,” said Micron Technology President and CEO Sanjay Mehrotra.

“Our technology leadership in both DRAM and NAND places Micron in an excellent position to capitalize on the secular demand driven by AI and 5G, and to deliver new levels of user experience and innovation across the data center and intelligent edge,” the CEO added.

Micron Technology has traded steadily between $90-$95 per share over the last month, but the stock is up roughly 93% in the past six months.

Ahead of earnings, Rosenblatt Securities analyst Hans Mosesmann reiterated his “buy” rating and price target of $150 on the firm.

Needham & Company also maintained its “buy” rating on shares of Micron with a price target of $120.

Rosenblatt’s price target represents a potential 61% surge from April 1 intraday highs, while Needham’s represents a potential 30% jump.

Overall analysts are bullish on shares of Micron. The company boasts 47 “buy” ratings, 10 “neutral” ratings, and just one “sell” ratings from analysts.

Micron traded up 3.75% as of 1:44 p.m. ET after paring gains on Thursday.

MU stock chart
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Taiwan Semiconductor slips as Intel announces plans to spend $20 billion on new chip factories

FILE PHOTO - A logo of Taiwan Semiconductor Manufacturing Co (TSMC) is seen at its headquarters in Hsinchu, Taiwan August 31, 2018. Picture taken August 31, 2018. REUTERS/Tyrone Siu
A logo of Taiwan Semiconductor Manufacturing Co (TSMC) is seen at its headquarters in Hsinchu.

Taiwan Semiconductor’s stock slipped on Wednesday after Intel announced plans to spend $20 billion on two new chip factories in Arizona.

Intel’s new CEO Pat Gelsinger laid down plans to directly compete with Taiwan Semiconductor and its South Korean rival Samsung in the foundry business creating chips for companies around the world.

“Intel is back. The old Intel is the new Intel,” Gelsinger said in a March 23 virtual presentation. “We’re going to be leaders in the market and we’re going to satisfy the new foundry customers, because the world needs more semiconductors and we’re going to step into that gap in a powerful and meaningful way.”

Intel is taking advantage of incentives from both federal and local governments to help roll out its new factories after President Biden signed an executive order to bolster US supply chains amid a worldwide semiconductor shortage in late February.

Intel’s Arizona factories will create over 3,000 permanent high-tech jobs, 3,000 construction jobs, and roughly 15,000 local long-term jobs for the region.

Taiwan Semiconductor shares continued their more than month-long fall on Wednesday after the Intel news broke. The stock is down roughly 20% from February 16 record highs.

In a note to institutional investors on Wednesday, Wedbush’s Brad Gastwirth said he believes TSMC’s fall on the Intel news is overdone.

The Chief Technology Strategist said he sees Intel’s new foundry business as an expensive move that could have an “elongated” production timeline, not producing any revenues for Intel until 2022 or 2023.

Taiwanese Economy Minster Wang Mei-hua added a similar opinion when leaving parliament on Wednesday, saying Intel’s $20 billion investment wouldn’t be a challenge to Taiwan Semiconductor and other Taiwanese chip makers, Reuters reported.

Taiwan Semiconductor has enough of its own problems without Intel’s move into the foundry business.

A water shortage has threatened production at TSMC for over a month now, and Bloomberg reported on Wednesday that the water supply to chip makers has been cut entirely as a drought continues to lower water reserves in the island nation.

Taiwan Semiconductor traded down 4.13% as of 9:58 a.m. ET on Wednesday.

TSM chart 2
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