Micron Technology (NASDAQ: MU) shares surged on Monday, building on momentum from a strong earnings report. Barron's labeled it an AI winner, and several other AI stocks rose, defying the broader market downturn.
As of 12:04 p.m. ET, Micron was up 7.8%, marking a 23% increase since its fiscal second-quarter earnings report.
The company, which had been grappling with a semiconductor sector downturn, signaled a turnaround driven by AI demand and tight supply, leading to accelerated profitability.
Its revenue soared 58% to $5.82 billion, reporting an adjusted profit of $476 million, or $0.42 per share, a significant improvement from a $2.08 billion loss a year ago.
CEO Sanjay Mehrotra highlighted Micron's significant potential in the AI-driven semiconductor industry.
The recent surge in Micron stock was bolstered by a bullish Barron's endorsement, which hailed it as one of the top long-term opportunities in the AI boom. Other AI stocks, such as Super Micro Computer and Arm Holdings, also rose, indicating sustained investor interest in the sector.
Looking ahead to the fiscal third quarter, Micron expects further growth, forecasting $6.6 billion in revenue, a 76% increase year-over-year, with gross margins improving to 24%-27% from 18.5% in the second quarter.
While Nvidia has been a dominant force in the early AI boom, investors are recognizing that there will be multiple winners among chip stocks, with Micron emerging as a strong contender.