Micron (MU +3.11%) stock jumped 4.5% through 10:45 a.m. ET Friday -- and investors can thank Intel (INTC +23.33%) for that. Intel blew past analyst forecasts for $0.01 in pro forma earnings last night, reporting $0.29 per share instead. Sales of $13.6 billion likewise beat expectations.
Investors are exuberant, and they're buying everything semiconductor-related this morning.
Image source: Getty Images.
What Intel's good news means for Micron
Micron specializes in computer memory, which companies like Intel and Nvidia (NVDA +4.30%) pair with fast artificial intelligence chips to train their large language models, and use even more intensively when retrieving information for "inference" -- answering questions posed to AI. Investors are betting that as Intel's sales grow, so too will Micron's.
And Intel is growing nicely right now.
Intel reported 7% year-over-year sales growth last night, and another positive pro forma profit. (While non-GAAP profitable, though, Intel is still reporting losses as calculated under generally accepted accounting principles (GAAP).)
Even better, in giving guidance last night, Intel predicted sales will grow 5% sequentially in Q2 and the company will finally report real GAAP profits as well, earning about $0.08 per share (and $0.20 non-GAAP).
Intel CEO Lip-Bu Tan says the AI market is shifting from training (which powered Nvidia's profits) "to inference to agentic" tasks, giving Intel a chance to catch up to its archrival -- and creating even more demand for the high-bandwidth memory that Micron produces.
NASDAQ: MU
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What's next for Micron stock?
Micron stock has beaten analyst forecasts every quarter for the past three years. That's a tough record to maintain, but judging from Intel's report last night, Micron has every chance to keep on winning.
At a valuation of less than 23 times trailing earnings -- and barely 8x forward earnings -- Micron stock looks like a winner to me.
