Micron shares surge after chipmaker raises its guidance

Kai Pfaffenbach | Reuters

A booth of Micron Technology at an industrial fair in Frankfurt, Germany.

Micron shares are rising as the company said its financial results will be better than expected.

On Monday the chipmaker increased its guidance for its fiscal third quarter ending in May.

Micron now expects sales for the quarter to be in the range of $7.7 billion to $7.8 billion versus its previous guidance of $7.2 billion to $7.6 billion. It also forecasts earnings per share of $3.12 to $3.16 compared to the prior target of $2.76 to $2.90 for the same quarter.

“Our third quarter results are driven by focused execution of our strategy against a backdrop of healthy industry fundamentals,” said Sanjay Mehrotra, president and CEO of Micron in the release.

Shares of Micron rose 4.7 percent in early trading Monday.

One Wall Street analyst said last week Micron shares are a great way ride the chip industry’s secular growth.

“Micron offers a unique way for investors to gain exposure to DRAM and NAND markets at what we view as attractive valuations,” RBC Capital Markets Amit Daryanani said Wednesday.

Micron’s stock is one of the best-performing names in the market. Its shares are up more than 100 percent in the previous 12 months through Monday morning versus the S&P 500’s nearly 15 percent return.