Micron's AI-Driven Revenue Surge Overshadowed by Margin Concerns

Chipmaker Micron's shares slump as tepid margin forecast eclipses AI prospects

March 21 (Reuters) - Micron's (MU.O), opens new tab shares fell 8% on Friday, as its dour margin forecast took the shine off a robust quarterly revenue outlook driven by demand for its semiconductors used in artificial intelligence tasks. Micron, one of only three providers of high-bandwidth memory (HBM) chips for data-intensive generative AI applications, forecast adjusted gross margin below estimates on Thursday, as lower pricing for consumer memory chips hits profitability. After a 1.4% drop in 2024, Micron's shares have gained more than 13% this year as investors bet on improving consumer memory chip pricing and expected the company to benefit from its essential position in AI supply chains. "NAND Flash oversupply remains a drag on margins," Rosenblatt analysts said in a note on Friday, referring to a type of memory chip used in consumer electronics like smartphones and personal computers. Soft end-market demand and aggressive buying by electronics suppliers during the pandemic led to oversupply of the consumer memory chips, resulting in weaker pricing. Micron forecast third-quarter adjusted gross margin of about 36.5%, marginally below analysts' average estimate of 36.9%, according to data compiled by LSEG. The forecast represents a sequential drop of 3 percentage points. "There has been a challenging industry environment in NAND," Micron's chief business officer Sumit Sadana said on Thursday during a post-earnings call. Micron has been cutting back on NAND production, resulting in underutilization which spreads fixed costs over a smaller output, hurting margins. AI DEMAND PERSISTS The ramp-up of HBM production to meet strong demand for its AI memory chips from GPU market leaders like Nvidia (NVDA.O), opens new tab, has also pressured margins. Micron forecast third-quarter revenue above estimates, owing to AI-linked strength. "We see high-bandwidth memory as a key growth driver," Morningstar analysts said, adding that they expect "continued AI and data center demand." Reporting by Arsheeya Bajwa in Bengaluru; Editing by Sahal Muhammed Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence

Micron forecasts upbeat quarterly revenue on demand for AI memory chips

March 20 (Reuters) - Micron Technology (MU.O), opens new tab forecast third-quarter revenue above Wall Street estimates on Thursday, signaling strong demand for its high-bandwidth memory (HBM) chips used by the AI industry. The company's shares rose nearly 5% in after-hours trading. The stock had risen 9% this month, ahead of earnings, on investor optimism that Micron would benefit from AI-driven demand. A surge in demand for artificial intelligence has significantly boosted the demand for Micron's high-bandwidth memory (HBM) chips. These chips, essential for advanced AI systems, are a type of dynamic random access memory or DRAM standard first produced in 2013, where chips are vertically stacked to save space and reduce power consumption. The company said it expects revenue of $8.80 billion, plus or minus $200 million for the quarter, compared with an estimate of $8.5 billion, according to data compiled by LSEG. Reporting by Juby Babu in Mexico City; Editing by Vijay Kishore Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence

Micron's stock makes late-trading gains as AI memory chips drive solid jump in revenue - SiliconANGLE

Micron's stock makes late-trading gains as AI memory chips drive solid jump in revenue Memory chip maker Micron Technology Inc. posted a strong earnings and revenue beat, demonstrating that it's still enjoying a significant boost from artificial intelligence. Growth in sales of its highest-capacity memory products was rampant, and its stock moved higher after-hours. The company reported second-earnings before certain costs such as stock compensation of $1.56 per share, up 42 cents from the prior year and beating Wall Street's consensus forecast of $1.43 by a comfortable margin. Revenue for the period hit $8.05 billion, up 38% and also beating the Street's target of $7.9 billion. All told, Micron's net income grew to $1.58 billion, almost doubling from the $793 million profit it delivered in the same period last year. Micron said its sales growth was primarily driven by its newest high-bandwidth memory chips, which have become a key component of high-end AI servers. During the quarter, sales of HBM chips surpassed the $1 billion milestone for the first time, up 50% compared to the prior quarter. Micron Chairman, President and Chief Executive Sanjay Mehrotra (pictured) hailed the company's impressive growth in data center revenue, which tripled from the previous year. "We are extending our technology leadership... We expect record quarterly revenue in fiscal Q3, with DRAM and NAND demand growth in both data center and consumer-oriented markets," he added. Micron is a leader in the market for dynamic random-access memory chips, which are used in PCs and data center servers. It also sells flash memory chips, which are found in smartphones and solid-state drives. More recently, it has become a major player in the market for HBM chips, where it competes with the likes of SK Hynix Inc. and Samsung Electronics Co. Ltd. Looking to the next quarter, Micron offered a forecast of $1.57 per share in earnings, coming in ahead of the Street's guidance of $1.52. In terms of revenue, it said it's expecting to generate $8.8 billion in sales, plus or minus $200 million. That's nicely ahead of Wall Street's forecast of $8.47 billion in revenue. Micron's stock gained 2% in extended trading on the back of the report, as investors try to understand if the company is in just another one of its endless industry cycles, where demand increases before dropping off again, or if the demand for HBM memory is more of a long-term revenue driver for the company. With Micron's guidance promising yet more growth, it's likely to have strengthened investor's confidence in the longer-term bull case, but the market remains well aware that it all rests on the industry continuing to throw money at AI. In addition, analysts have forecast DRAM sales to grow by 31% over the next six quarters. Mehrotra told analysts on a conference call that the company has sold all of the HBM chips it has the capacity to manufacture in calendar 2025. "We expect multi-billion revenue in fiscal 2025," he said. "We are seeing strong demand for our HBM supply in 2026 too, and are in discussions with customers on agreements for their calendar 2026." The CEO also told analysts he's expecting personal computer sales to grow by a single-digit percentage this year. According to him, this will boost the company further as the next-generation AI PCs expected to drive that growth require substantially more memory than standard PCs. "Micron is in the best competitive position in its history, and we are achieving shared gains across high-margin product categories in our industry," he insisted. Micron's stock is doing better than most, having gained 22% since the start of the year, while the Nasdaq composite index is down 8% over the same timeframe.

Micron's stock falls despite solid jump in revenue from AI memory chips - SiliconANGLE

Micron's stock falls despite solid jump in revenue from AI memory chips Memory chip maker Micron Technology Inc. posted a strong earnings and revenue beat, demonstrating that it's still enjoying a significant boost from artificial intelligence. Growth in sales of its highest-capacity memory products was rampant, and its stock moved higher after-hours. However, on Friday, its stock was falling more than 7% on another down day for the overall market. The company reported second-earnings before certain costs such as stock compensation of $1.56 per share, up 42 cents from the prior year and beating Wall Street's consensus forecast of $1.43 by a comfortable margin. Revenue for the period jumped 38%, to $8.05 billion, also beating the Street's target of $7.9 billion. All told, Micron's net income grew to $1.58 billion, almost doubling from the $793 million profit it delivered in the same period last year. Micron said its sales growth was primarily driven by its newest high-bandwidth memory chips, which have become a key component of high-end AI servers. During the quarter, sales of HBM chips surpassed the $1 billion milestone for the first time, up 50% from the prior quarter. Micron Chief Executive Sanjay Mehrotra (pictured) hailed the company's impressive growth in data center revenue, which tripled from the previous year. "We are extending our technology leadership.... We expect record quarterly revenue in fiscal Q3, with DRAM and NAND demand growth in both data center and consumer-oriented markets," he added. Micron is a leader in the market for dynamic random-access memory chips, which are used in PCs and data center servers. It also sells flash memory chips, which are found in smartphones and solid-state drives. More recently, it has become a major player in the market for HBM chips, where it competes with the likes of SK Hynix Inc. and Samsung Electronics Co. Ltd. Looking to the next quarter, Micron offered a forecast of $1.57 per share in earnings, coming in ahead of the Street's guidance of $1.52. In terms of revenue, it said it's expecting to generate $8.8 billion in sales, plus or minus $200 million. That's nicely ahead of Wall Street's forecast of $8.47 billion in revenue. Investors appear to be trying to understand if the company is in just another one of its endless industry cycles, where demand increases before dropping off again, or if the demand for HBM memory is more of a long-term revenue driver for the company. With Micron's guidance promising yet more growth, it's likely to have strengthened investor's confidence in the longer-term bull case, but the market remains well aware that it all rests on the industry continuing to throw money at AI. In addition, analysts have forecast DRAM sales to grow by 31% over the next six quarters. Mehrotra told analysts on a conference call that the company has sold all of the HBM chips it has the capacity to manufacture in calendar 2025. "We expect multibillion[-dollar] revenue in fiscal 2025," he said. "We are seeing strong demand for our HBM supply in 2026 too, and are in discussions with customers on agreements for their calendar 2026." The CEO also told analysts he's expecting personal computer sales to grow by a single-digit percentage this year. According to him, this will boost the company further as the next-generation AI PCs expected to drive that growth require substantially more memory than standard PCs. "Micron is in the best competitive position in its history, and we are achieving shared gains across high-margin product categories in our industry," he said. Holger Mueller of Constellation Research Inc. said he agreed with that assessment, noting that Micron is on a roll at the moment. "It sold over $1 billion worth of its HBM memory products in the quarter, which shows exactly where the new demand is coming from, and that has helped put Micron in a very good place," the analyst said. "It doubled its profit and earnings per share, and there may be more to come as Micron readies its new 1-gamma DRAM node, which could help it to stretch its lead in a very key industry." Micron's stock is doing better than most, having gained 22% since the start of the year, while the Nasdaq composite index is down 8% over the same time frame.

Micron Stock Pops as AI Demand Drives Better-Than-Expected Earnings, Outlook

Micron Technology (MU) reported quarterly results that topped analysts' estimates and issued a better-than-expected outlook, sending shares higher in extended trading Thursday. The memory chip maker and Nvidia (NVDA) partner saw its fiscal second-quarter revenue jump 38% year-over-year to $8.05 billion, above the analyst consensus from Visible Alpha. Adjusted earnings of $1.78 billion, or $1.56 per share, rose from $476 million, or 42 cents per share, a year earlier, also beating projections. The gains came as data center sales tripled year-over-year, CEO Sanjay Mehrotra said, driven by strong demand for artificial intelligence. In the current quarter, Micron expects revenue of $8.6 billion to $9 billion and adjusted earnings per share of $1.47 to $1.67. By comparison, analysts called for revenue of $8.53 billion and adjusted EPS of $1.51 per share. Micron shares surged over 5% in extended trading Thursday following the release. They've gained 22% in 2025 through the closing bell.

Micron forecasts upbeat quarterly revenue on strong AI memory chip demand

AI demand has significantly boosted the need for Micron's HBM chips, a type of dynamic random access memory or DRAM standard essential for advanced AI systems, including Nvidia's processors, the main beneficiary of the AI boom.Micron Technology forecast third-quarter revenue above Wall Street estimates on Thursday, signaling strong demand for its high-bandwidth memory (HBM) chips used in AI models, sending its shares up 2% in after-hours trading. AI demand has significantly boosted the need for Micron's HBM chips, a type of dynamic random access memory or DRAM standard essential for advanced AI systems, including Nvidia's processors, the main beneficiary of the AI boom. "Sequential growth will continue to happen throughout calendar 2025 as we continue to ramp our capacity and market share in HBM," Micron's Chief Business Officer Sumit Sadana told Reuters. All of its HBM chips are sold out for calendar year 2025, he added. Micron, which also offers flash memory NAND chips for the data storage market, expects DRAM and NAND demand growth in both data center and consumer-oriented markets, with significantly improved profitability in fiscal 2025 ending August. Micron's "strong forecast, exceeding analyst expectations on both revenue and earnings, underscores their pivotal role in providing the essential memory components for AI infrastructure," said Michael Ashley Schulman, chief investment officer at Running Point Capital. Micron said it has not included the impact of potential new tariffs imposed by U.S. President Donald Trump in its forecast due to uncertainty around timing, nature and implementation, but intends to pass on any costs to customers. Trump's rapidly changing tariff policies, including numerous tariff threats, have led to increased economic uncertainty. The company said it expects revenue of $8.80 billion, plus or minus $200 million for the third quarter, compared with an estimate of $8.5 billion, according to data compiled by LSEG. Revenue for the second quarter ending February 27 was $8.05 billion, beating an average estimate of $7.89 billion. Excluding items, earnings per share was $1.56, above an estimate of $1.42 per share.

1 Super Semiconductor Stock (Besides Nvidia or AMD) to Buy Hand Over Fist for the Artificial Intelligence (AI) Revolution | The Motley Fool

The artificial intelligence (AI) revolution wouldn't be possible without the semiconductor industry. The majority of development happens inside data centers that are filled with graphics processing units (GPUs) from leading suppliers like Nvidia (NVDA 3.16%) and Advanced Micro Devices (NASDAQ: AMD). However, AI workloads are also demanding more memory and storage capacity not just in data centers, but also in personal computers (PCs) and smartphones, and Micron Technology (MU 2.32%) is a top supplier of that hardware. The company just released its financial results for its fiscal 2025 second quarter (ended Feb. 27), and they revealed soaring revenue led by AI-related demand. Here's why Micron stock could be a great buy for investors seeking exposure to the AI boom. Memory is a critical component in data-intensive AI training and AI inference workloads. It stores information in a ready state so it can be called upon by GPUs instantly, which speeds up processing time. Micron's HBM3E (high-bandwidth memory) for the data center is the best in the industry, delivering 50% more capacity than competing solutions while consuming 30% less energy. Nvidia is using Micron's HBM3E in its industry-leading Blackwell GB200 GPU, which is currently the gold standard for AI development. Nvidia will also use it in the upcoming Blackwell Ultra GB300 GPU, which will deliver even more processing power for AI applications. Since Nvidia's top four customers have ordered 3.6 million Blackwell chips already, it's no surprise Micron is completely sold out of its HBM3E solutions for calendar year 2025, and is already experiencing strong demand for its 2026 supply. Micron says the market for HBM was worth $16 billion in 2024, and is set to more than double to $35 billion this year. It could then be worth $100 billion by 2030, so there will be astronomical financial rewards for staying ahead of the competition. In order to do so, Micron plans to launch its new HBM4E solution for the data center in 2026, which will provide a whopping 60% increase in bandwidth compared to the previous generation. But Micron's AI opportunity transcends the data center. As chips become more powerful, AI workloads will shift to PCs and smartphones, allowing chatbots and other applications to run offline. This will create a faster user experience and make them accessible from anywhere. The company says AI PCs already require a minimum DRAM (memory) capacity of 16 gigabytes, up from an average of 12 gigabytes for non-AI PCs last year. Similarly, most AI smartphones now require 12 gigabytes of capacity or more, up from 8 gigabytes last year. Micron's smartphone memory solutions are used in a number of Android-powered devices from top manufacturers including Samsung. More memory capacity translates into more revenue for Micron, so the company is positioned to win whether AI workloads are processed in data centers or on devices. Micron generated $8 billion in total revenue during its fiscal 2025 second quarter, which represented a 38% increase compared to the year-ago period. However, there was a much bigger growth story beneath the surface of the headline number. Revenue from Micron's compute and networking segment, which is where it accounts for its data center memory sales, soared by a whopping 109% to a record $4.6 billion. Plus, revenue attributable just to HBM made up $1 billion of that figure, which was also a record high. On the flip side, revenue from Micron's mobile segment shrank by 33% to $1 billion, as customers had some built-up inventories that softened demand. However, the company expects to see modest growth in the mobile business this calendar year overall, especially as AI smartphone adoption kicks into high gear. Micron's strong top-line result led to a significant increase in its profitability, with earnings per share (EPS) doubling to $1.41. That trend is likely to continue in the current fiscal 2025 third quarter -- the company is forecasting $8.8 billion in revenue and $1.37 in EPS, representing year-over-year growth of 29% and 356%, respectively. Since some of Micron's hardware like the HBM3E memory is already sold out this year, there is some predictability to the company's financial results. Wall Street's consensus forecast (according to Yahoo!) suggests its EPS will come in at $6.93, placing its stock at a forward price-to-earnings (P/E) ratio of just 13.6. As I highlighted earlier, Nvidia is using Micron's HBM3E in its flagship GPUs like the GB200 and GB300. Since Nvidia already has orders for millions of those chips, Micron is likely to experience monumental sales growth in tandem over the next couple of years. As a result, it's hard to justify the steep discount in Micron stock. Plus, Micron will benefit significantly as AI workloads shift from data centers to PCs and smartphones, so the company is perfectly positioned to capitalize on this technological revolution. As a result, I think Micron stock could be a great addition to any balanced portfolio.

Looking for a Bargain? 1 Artificial Intelligence (AI) Chip Stock to Buy the Dip Hand Over Fist. (Hint: It's Not Nvidia.) | The Motley Fool

Many leading chip companies have witnessed pronounced sell-offs so far in 2025. This year has been absolutely brutal for technology stocks so far. In particular, the semiconductor industry has witnessed some notable sell-offs. As of market close on March 21, shares of Nvidia were down 12% on the year. Peers such as Taiwan Semiconductor Manufacturing and Broadcom have declined by 10% and 17%, respectively. But one chip stock that has actually outperformed many of its peers so far in 2025 is Micron Technology (MU 1.07%), with a gain of roughly 12%. Despite these gains, Micron remains relatively under the radar in the artificial intelligence (AI) arena, and the stock is an absolute bargain right now. Let's dig into why the company is quietly emerging as an important player in the chip space and assess its valuation relative to its peers. Building AI applications requires the ability to move large data sets efficiently. Without this, processing data inside large language models (LLMs) and other AI applications would create a logjam, ultimately taking a toll on productivity and automation. Micron is helping to solve this through the power of high-bandwidth memory (HBM), a mechanism that provides AI chips the ability to process data at materially faster speeds compared to legacy memory and storage solutions. As AI workloads move beyond more basic applications, such as chatbots, and transition to increasingly more complex fields like autonomous driving, machine learning, or robotics, the need for HBM is expected to rise considerably. The charts below illustrate Micron's revenue and earnings trends over the last three years. Like many of its peers in the chip realm, revenue has entered a period of continued acceleration underscored by widespread AI adoption. But what I find more encouraging is that the strong demand tailwinds have helped the company transition from a cash-burning business to one that is now consistently profitable. Just a few days ago, Micron reported earnings for the second quarter of its fiscal 2025. While the latest batch of financials were encouraging, CEO Sanjay Mehrotra shared some guidance that should have investors jumping for joy. He said that next quarter is expected to produce record revenue, and for the full year, management is calling for "significantly improved profitability." The combination of accelerating revenue, improved unit economics, and its unique application in the broader chip industry makes the company a compelling opportunity for long-term investors. Below, I'll dig into the stock's valuation to make my case for why it should be on the radar of AI investors. The analysis below benchmarks Micron against a cohort of other leading chip stocks on a forward price-to-earnings (P/E) basis. Not only is Micron the cheapest stock among this peer set based on its forward P/E, but the trends above also show some serious multiple compression over the last year. At just $94 per share, the stock is trading close to a 52-week low. I find this odd considering the company is generating record sales on a consistent basis, it's now profitable, and management is forecasting even more robust growth. At the end of the day, I think the fundamentals in Micron's underlying business are largely disconnected from the company's valuation. Right now, I see the stock as an absolute bargain in what is perhaps the hottest area supporting the AI revolution (i.e., chips). I think investors who are looking for less obvious opportunities in the AI chip space and are interested in long-term growth should consider buying the dip in Micron stock hand over fist right now.

The Market Is Wrong: 3 Reasons Micron's Stock Should Be Up, Not Down After Earnings | The Motley Fool

Micron has become one of the most important players in the artificial intelligence (AI) races over the past two years. While some legacy Micron businesses are currently in a downturn, investors may be taking too short term of an approach, missing the AI forest for the legacy market trees. Looking under the hood of Micron's recent earnings, there were actually several long-term positives that should continue to improve revenue and profits through the rest of this year and into 2026. In its fiscal second-quarter 2025, Micron grew revenue 38% year over year to $8.05 billion, while adjusted (non-GAAP) earnings per share (EPS) grew 271% to $1.56. Both figures came in ahead of expectations. On the back of the solid earnings beat, shares initially rose after-hours but then plunged the next day. The downturn appears to be due to guidance, specifically for gross margins in the current quarter. While revenue is projected to be up nearly 10% quarter over quarter, earnings are projected to be just flat, as adjusted gross margins are projected to fall to 36.5%, down 1.5 percentage points, while operating expenses are projected to increase by about $100 million. Short-term traders appear overly concerned with the near-term margin trajectory. But those concerns are likely overblown. Management attributed the negative margin impact to increased sales of lower-margin consumer electronics memory, which will stage a recovery after a soft quarter. On top of that, management noted the NAND flash market continues to be weak. NAND prices actually plunged by a high-teens percentage last quarter alone. Still, the negativity appears to be within less important parts of Micron's business. NAND only made up 26% of revenues last quarter, and the consumer markets are all becoming less important as Micron's enterprise data center business continues to take off thanks to AI. Those good trends around AI and DRAM should eventually overtake the bad later in 2025, and longer-term investors should also be highly encouraged by three overwhelming positive trends described in the earnings release, too. Perhaps the most consequential change to the memory industry in recent years has been the emergence of high-bandwidth memory (HBM) used in AI applications. On its prior call in December, Micron indicated it saw the HBM market growing from $16 billion in 2024 to $30 billion in 2025, then to over $100 billion by 2030. That's a massive, completely new segment that would exceed the entire pre-HBM DRAM industry by that time. Meanwhile, rival Samsung is struggling with HBM yields, and Micron is rapidly catching up to HBM leader SK Hynix, even surpassing SK Hynix in terms of HBM technology metrics while catching up in terms of market share. And Micron's HBM news continues to get better. On the call with analysts, CEO Sanjay Mehrotra now sees an even higher $35 billion HBM market this year, up from the prior guidance of $30 billion. He also expects Micron to attain the same market share gains it forecast before. Given that Micron had already said it was sold out of its HBM product for 2025, how is the company now able to exceed its prior targets? On the post-earnings call, management mentioned the increase is due to Micron's strong manufacturing having improved yields relative to its prior plans, along with an earlier shift to 12-high HBM from 8-high HBM. The former carries higher prices, so the move to the more advanced technology is translating into revenue tailwinds. Micron also mentioned it had landed a third large customer for its HBM products as it continues to gain market share here. And quarterly HBM revenue exceeded $1 billion for the first time -- about 12.5% of the total revenue. As high-margin HBM continues to grow from 12.5% of revenue today to a much higher proportion, Micron's revenue and earnings should continue to increase over the medium term. Micron's AI innovation doesn't stop at HBM. The company also announced it has developed a new kind of low-power data center DRAM (LPDRAM) it calls Small Outline Compression Attached Memory Module, or "SOCAMM," which is a lower-power memory specifically designed for data center usage. Previously, low-power DRAM had been used in smaller devices where power consumption was paramount, such as smartphones. However, Micron is the first to develop this new modular LPDRAM, with up to two-thirds power savings compared with the standard D5 DRAM memory for the data center. Micron developed this memory in collaboration with AI leader Nvidia (NVDA 3.16%) specifically to support Nvidia's upcoming Grace-Blackwell 300 (or GB300) superchip. Unlike HBM, where Micron had to catch up with SK Hynix, Micron is out front and the first to be manufacturing this type of data center LPDRAM in volumes. Given the heat and power demands of AI data centers, the new kind of memory also has the possibility of generating billions in new revenue alongside HBM in the AI era. Finally, there is a potentially big opportunity looming for Micron in its biggest problem segment right now -- NAND flash. While the overall NAND flash market is in a downturn, Micron has actually been scooping up market share in the best long-term NAND market -- high-end data center solid state drives (SSDs). Management noted Micron achieved a record-high market share in data center SSDs last year and should continue to take more share in that segment. But a big opportunity may be on the horizon for SSDs in AI data centers if data center operators begin to use more NAND flash SSDs to replace hard disk drives (HDDs). Right now, the older HDD technology is cheaper for bulk storage. But latency, space, and power consumption issues in AI data centers are spurring operators to switch to SSDs. Management noted on the post-earnings call: I think that attempt to dramatically reduce HDDs has started at the most leading customers. You have seen some announcements from Pure Storage, and we are suppliers to them, and we are also working with the end customers who are wanting to deploy very large capacity SSDs, and remove HDDS from their future infrastructure deployment. So it's an exciting opportunity. It'll take some time to develop, but once it gets going it will definitely have a snowball effect. If AI data centers begin to switch en masse to SSDs from HDDs, it could really improve demand on the NAND side, which has been the segment weighing down Micron's margins. Should that segment improve along with the booming AI DRAM industry, Micron's profits could jump significantly, perhaps in 2026 or 2027.

Micron forecasts upbeat quarterly revenue on demand for AI memory chips

March 20 (Reuters) - Micron Technology forecast third-quarter revenue above Wall Street estimates on Thursday, signaling strong demand for its high-bandwidth memory (HBM) chips used by the AI industry. The company's shares rose nearly 5% in after-hours trading. The stock had risen 9% this month, ahead of earnings, on investor optimism that Micron would benefit from AI-driven demand. A surge in demand for artificial intelligence has significantly boosted the demand for Micron's high-bandwidth memory (HBM) chips. These chips, essential for advanced AI systems, are a type of dynamic random access memory or DRAM standard first produced in 2013, where chips are vertically stacked to save space and reduce power consumption. The company said it expects revenue of $8.80 billion, plus or minus $200 million for the quarter, compared with an estimate of $8.5 billion, according to data compiled by LSEG. (Reporting by Juby Babu in Mexico City; Editing by Vijay Kishore)