Micron Technology stock jumped 6.5 % in premarket trade on Tuesday, as the chipmaker promised a record year of sales with "solid profitability" following a strong start to the fiscal year.
Strong demand for its memory and storage chips from a variety of clients, including data centres, mobiles, graphics, and automotive clients, drove revenue up by a third to $7.7 billion in the quarter ended December 2.
The company's adjusted profit per share increased by 177 % year over year to $2.16, greatly exceeding expectations.
Data centre revenue growth of more than 70% more than compensated for a downturn in demand from the PC sector.
5G, AI, and the adoption of electric vehicles, according to President and CEO Sanjay Mehrotra, are driving demand growth, and the business will increase capital spending to between $11 billion and $12 billion this year to fulfil that demand.
The business believes that the current shortage of components will ease gradually during the year and that its volume-based supply arrangements and strategic collaborations would enable it to weather any broader market disruptions.
Micron predicts $7.5 billion in revenue and a gross margin of roughly 46% in the current quarter.