Micron CEO says recovery is imminent after share price plummet
The chipmaker missed its revenue forecasts by $110 million but suggests recovery is imminent
Micron Technology's chief has remained defiant in the face of his firm's plummeting share price, suggesting customer demand continues to be strong.
The firm's CEO Sanjay Mehrotra suggested demand for memory and storage "continues to be vibrant", despite Micron's stock falling over the last few days to a low of $31.41 at the time of writing.
Micron missed its revenue forecasts in its latest quarterly financial results released this week, reporting earnings of $7.91 billion against an expected $8.02 billion. This immediately set its share price back by more than 6%, according to reports.
Despite revenue up 16% year-on-year, and Mehrotra's assertion that Micron remains "bullish" on the long-term growth trends, its share price is valued at its lowest since September 2017, following a high of nearly $65 earlier this year.
"The most important thing is the end market demand drivers for memory and storage continue to be vibrant," Mehrotra said in an interview with CNBC's Mad Money host Jim Cramer.
"Our customers demand is strong. Our customers demand from us is impacted in the fiscal second quarter because of the inventory buildup. And then, supply cutbacks will kick in."
These supply cutbacks will target 'air pockets' of inventory buildup which is the result of "unprecedented" levels of demand, and more expensive DRAM chips. This, therefore, leads to a buildup of chip inventories in light of fears surrounding a potential shortage.
DRAM demand has gone up substantially in the last few years, he added, thanks to an increase in the scale of applications for the cloud, automotive and graphics areas. Now there are a more diverse set of drivers for growth, including mobile and IoT, that demand more memory to deliver applications.
"We are in that air pocket where this inventory has to be cleared from the customers," Micron's CEO continued, suggesting this will be cleared within a couple of quarters.
"But, again, the main point is that the end market demand drivers continue to be more diverse than they have ever been in the past."
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