Micron earnings on deck, with focus on China ban, AI boost to DRAM sales

Micron Technology  (MU) - Get Free Report shares edged higher in pre-market trading ahead of the memory chip-maker's fourth quarter earnings slated for after the closing bell.

Micron is expected to post a non-GAAP loss of around $1.18 per share for the three months ending in August, compared to a profit of $1.45 for the same period last year, owing to the impact of China's retaliatory ban on some of its chip products.

The Boise, Idaho-based tech group said earlier this spring that it sees quarterly revenues in the region of $3.7 billion to $4.1 billion, with Street forecasts suggesting a tally of around $3.9 billion.

That's around aa 40% decline from last year and follows the "security review" by China's Cyberspace Administration, put in place as retribution for the Biden administration's ban on the export of high-tech equipment and chips, which CEO Sanjay Mehrotra called a "significant headwind that is impacting our outlook and slowing our recovery."

Micron's link to the surge in AI investment, particularly through the DRAM chips it makers that are used in data centers around the world, could provide a longer-term boost for revenues as companies look to deploy generative AI technologies 

"I think it's fair to think that AI will start driving demand," said Elzar Advisors analyst Chaim Siegel, who recently lifted his rating on Micron to 'buy' following improved forecasts for DRAM pricing next year.

"DRAM pricing is the single most important driver to MU and maybe to tech and probably to the market, and memory is in everything tech," he added. "Memory is a commodity so when you have imbalances it gives you a read on overall demand in the tech space."

Micron share were marked 0.65% higher in pre-market trading to indicate an opening bell price of $68.38 each.

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