Micron Technology surges: Memory chipmaker Micron Technology saw a record surge in its stock on Thursday following a robust revenue forecast, sparking optimism that the growing demand for AI hardware would propel the Nvidia supplier to new heights.

The stock rose by 15 per cent, lifting the broader Philadelphia chip index by 3 per cent. Micron, known for reporting earnings ahead of its peers, serves as a barometer for broader semiconductor demand.

HBM chips sold out 

According to the company, its high-bandwidth memory (HBM) chips, crucial for ultra fast semiconductors used in AI applications, are already sold out for 2024, with a majority of its 2025 supply already allocated.

"Memory is a key beneficiary of AI adoption, and we expect a V-shaped recovery in the industry, with revenues projected to grow by 55 per cent in 2024 and 35 per cent in 2025," said Mark Haefele, chief investment officer at UBS Global Wealth Management.

Micron, a major supplier of HBM chips to Nvidia alongside South Korea's SK Hynix, was poised to add nearly $16 billion to its market value based on its share price.

Trading at about 24 times its 12-month forward earnings estimates, Micron's shares have surged over 60 per cent in the past year. Investors are confident that the company will increase its share of the high-margin HBM market in 2024 and beyond.

Micron's current-quarter forecast for adjusted gross margin, above market estimates, indicates its strong position due to the short supply of HBM chips, giving the company more pricing power.

(with Reuters inputs)