Aerosmith saw this coming.
In 1993, the band released a hit song called “Livin' on the Edge,” which described a world in serious trouble.
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The world is still quite a conflictive place today.
And now, in this era of artificial intelligence, we live in a different kind of edge, specifically edge ai, where ai applications are deployed on devices throughout the physical world.
“It's called 'edge ai' because ai computing is done near the user at the edge of the network, close to where the data is, rather than centrally in a cloud computing facility or data center. private data”. The titan of ai chip manufacturing, Nvidia (NVDA) said in aai/”> blog post.
Nvidia said advances in cutting-edge ai have opened opportunities for machines and devices, wherever they are, to operate with the “intelligence” of human cognition.
“ai-enabled smart applications learn to perform similar tasks under different circumstances, much like real life,” the post said.
Micron technology (IN) is making a rapid transition into the ai sector with a new semiconductor designed to support generative ai applications.
In February, Micron announced a development agreement with Nvidia to insert high-bandwidth memory into its new H200 semiconductors. Micron claims that HBM helps data flow efficiently with relatively low power consumption.
CEO: 'Micron has returned to profitability'
The Boise, Idaho, company, founded in 1978, is scheduled to report fiscal third-quarter results on June 26.
In March, Micron posted second-quarter adjusted earnings of 42 cents per share on sales of $5.82 billion, compared with a loss of $1.91 per share on sales of $3.69 billion in the same period a year earlier. .
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Analysts surveyed by FactSet expected Micron to lose 25 cents a share on sales of $5.35 billion in the latest period.
“Micron has returned to profitability and delivered positive operating margins a quarter earlier than expected,” said CEO Sanjay Mehrotra. told analysts during the company's earnings call. “Micron drove strong price increases as the balance between supply and demand tightened.”
“This improvement in market conditions was due to a confluence of factors including strong demand for ai servers, a healthier demand environment in most end markets, and supply reductions across the industry,” he said. .
For the third quarter, Micron estimates adjusted earnings of 45 cents per share on sales of $6.6 billion. Analysts had expected earnings of 9 cents per share on sales of $6 billion.
Micron analysts revise price targets
On Monday, several analysts adjusted their price targets for Micron ahead of next week's earnings report.
Bank of America Securities raised the company's price target on Micron to $170 from $144 and affirmed a Buy rating on the stock.
B of A analysts expect Micron to be a key beneficiary of the growing market share of high-bandwidth memory in cloud computing and the 12% to 15% annual increase in DRAM requirements to support PCs and smartphones with artificial intelligence.
Analysts said edge ai will “slowly but steadily supplement core or data center ai hardware.”
“It's certainly early days and there are no must-have ai apps for phones and PCs,” the firm said in a research note. “However, consumer hardware companies will look to take advantage of growing consumer interest and growing software ecosystem momentum to drive a faster update cycle.”
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B of A said the same trend took place with 4G and 5G deployments as devices with advanced hardware preceded the emergence of mobile applications such as Meta Platforms. (GOAL) Social media platform instagram and ride-sharing provider Uber (UBER) .
“While 4G/5G ushered in the need for better cellular/RF modems, we believe on-device ai will be most beneficial to processor and memory companies,” the investment firm said.
B of A also raised its price target for chipmaker Arm Holdings (ARM) to $180 from $150, and maintained a Buy rating on the stock.
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Although data center ai is enabling scale adoption of cloud/enterprise ai, B of A said that ai applications on the device or at the edge “promise faster performance (lower latency), personalization, privacy (your data stays on the device), and the ability to offload ai inference costs (and power requirements) to the device.”
Cantor Fitzgerald analyst CJ Muse raised the company's price target on Micron to $180 from $150 and maintained an Overweight rating on the stock.
Muse said he expected Micron to post a solid pace and rise versus analyst estimates, with upside coming from both DRAM and NAND, while HBM chips are also likely to be a bullish surprise.
The analyst said he expected these trends to carry over into August quarter forecasts as well, leading to consensus estimates moving up once again.
Susquehanna raised the company's price target on Micron to $185 from $143 and maintained a positive rating on the stock.
The company raised estimates across the board and in its third-quarter earnings report to reflect greater confidence in pricing trends for DRAM/NAND combo memory products.
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