Micron forecasts first-quarter revenue above estimates on AI demand

(Reuters) -Micron Technology forecast first-quarter revenue above market estimates on Tuesday, betting on booming demand for artificial intelligence hardware to boost sales of its advanced memory chips.

Shares of the memory chip maker rose 4% in extended trading.

The race to build the most sophisticated AI models and expand the data center infrastructure that they run on has boosted demand for Micron’s high-bandwidth memory chips, or HBM.

Micron supplies HBM for some of AI chip leader Nvidia‘s semiconductors, which dominate the lucrative AI accelerator market.

Much of the competition among the world’s largest memory suppliers — Micron, SK Hynix and Samsung — has centered on becoming a key supplier to Nvidia, owing to the world’s most valuable company’s dominant market position.

Micron forecast first-quarter sales of $12.50 billion, plus or minus $300 million, compared with the analysts’ average estimate of $11.94 billion, according to data compiled by LSEG.

The company reported revenue of $11.32 billion for the fourth quarter, beating estimates of $11.22 billion.

(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Alan Barona)