43% of CFOs plan to invest significantly in AI this year, yet only 20% say they have a clear strategy in place. The Modern CFO’s AI Playbook from Tabs shows how you can rethink your revenue infrastructure and prepare your finance team for the future. Download the guide now.
Let the chips fall where they may. And right now, some chipmakers are definitely falling.
While chipmakers fueling the generative AI boom, like Nvidia, have posted fairly consistent winning streaks in recent earnings reports, a dip in demand for smartphones has hurt semiconductor chipmakers. One of the laggards: Micron, which posted a weak earnings report on Wednesday.
Analysts were optimistic about a rebound for the computer data storage company, which seemed ready to cash in on growing demand for its high-bandwidth memory chip, a necessity for AI software training. That hasn't been the case—yet.
The chipmaker reported a steep loss in quarterly revenue: $4.01 billion, from $6.64 billion a year earlier.
Meanwhile, the company posted an adjusted quarterly loss of $1.07 per share, compared to earnings of $1.45 per share in the year-ago period. That’s a slight beat: Analysts expected an adjusted loss of $1.15. Micron also reported a net loss of $1.43 billion, compared to a net income of $1.49 billion a year earlier.
But Micron’s weak report isn’t all bad news, either for the company or chipmakers at large. Micron can eventually “benefit from AI,” Synovus Trust Senior Portfolio Manager Daniel Morgan told Yahoo Finance, noting the importance of high-bandwidth memory chips.
“Unfortunately, we’re not going to get an Nvidia-like impact from AI on this quarter,” he continued, in reference to Micron. “I think it’s something that’s going to play out over a longer period of time.”
In particular, memory chipmakers like Micron and Samsung stand to benefit from AI because “AI is extremely memory-intensive,” Morgan noted.
And the company seems ready for the long haul. Micron CEO and president Sanjay Mehrotra acknowledged a “challenging environment for the memory and storage industry” throughout fiscal 2023 in a statement tied to the report.
“Our 2023 performance positions us well as a market recovery takes shape in 2024, driven by increasing demand and disciplined supply,” Mehrotra said.