Micron, the chipmaker specializing in computer memory and storage, experienced a 5% decline in shares on Wednesday, despite posting better-than-expected quarterly results. The company's revenue guidance aligned with estimates, but investors focused on the in-line revenue forecast, causing the stock to drop 3% in extended trading.

For the fiscal third quarter ended on May 30, Micron reported adjusted earnings per share of 62 cents, surpassing the LSEG consensus estimate of 51 cents. Revenue reached $6.81 billion, slightly higher than the expected $6.67 billion. These positive financial results can be attributed to Micron's strong position in the growing artificial intelligence (AI) market.

Micron's stock has more than doubled in value over the past year, thanks to its involvement in the AI wave. With AI driving demand for its advanced memory chips, particularly in AI graphics processing units (GPUs) such as Nvidia's, the company is poised to benefit from the increasing need for technology to train and deploy AI applications.

Looking ahead, Micron expects adjusted earnings per share of $1.08 on revenue of $7.6 billion for the current quarter, surpassing analysts' expectations of $1.05 per share on revenue of $7.6 billion. The company's CEO, Sanjay Mehrotra, emphasized the burgeoning AI business and revealed that the data center segment experienced a 50% growth on a quarter-to-quarter basis.

Mehrotra also mentioned that Micron's AI-oriented products are likely to increase in price due to robust AI-driven demand for data center products, causing tightness on their leading-edge nodes. Despite a steady near-term demand in PCs and smartphones, Micron expects continued price increases throughout calendar 2024. Furthermore, the company revealed that its high bandwidth memory, crucial for AI chips, is already sold out through 2025.

Micron's financial recovery is remarkable, considering that it reported a net loss of $1.9 billion, or $1.73 per share, in the same quarter last year. With Micron positioned as one of the biggest beneficiaries in the semiconductor industry's multiyear growth opportunity driven by AI, Mehrotra expressed optimism about the future.

Overall, Micron's strong quarterly performance and its strategic focus on AI-driven technologies bode well for the company's future prospects. Despite the temporary decline in stock value, Micron's growth potential remains substantial.