Micron Technology (MU) -) shares slumped lower in in pre-market trading after the memory chip maker forecast further near-term losses despite an expected boost from a supply deal with AI market leader Nvidia (NVDA) -).
Micron said late Wednesday that its non-GAAP loss for the three months ending in August, the group's fiscal fourth quarter, came in at $1.07 per share, well inside Street forecasts of $1.18 but down from a profit of $1.45 per share over the same period last year.
Group revenues, Micron said, fell 40% to just over $4 billion thanks in part to the impact of its "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.
Looking into the current quarter, Micron said it sees another non-GAAP loss of $1.14 per share, compared to the Refinitiv forecast of a loss of 95 cents, with revenues of around $4.2 billion to $4.6 billion.
Micron's developing deal with Nvidia, which would see its 'high bandwidth memory', or HBM, chips embedded in Nvidia's AI computing chips, is likely to drive revenue growth further into 2024, the company said.
"We are very excited with our HBM product. It is an industry-leading product with respect to performance, power, capacity, capability. And as we have mentioned, this product is in the qualification stages with our customers here and we expect revenue to begin in early 2024," CEO Sanjay Mehrotra told investors on a conference call late Wednesday. "And yes, we are very much still on track for meaningful revenue, 'several hundred' million in our fiscal year '24."
"It is an exciting opportunity for the memory industry and Micron will be well-positioned to capture the generative AI opportunities that require the kind of attributes that our HBM3E memory brings to the market," he added.
Micron shares were marked 5.02% lower in late Thursday trading to change hands at $64.79 each.
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