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Aerosmith saw this coming.
In 1993, the band released a hit song called “Livin’ on the Edge,” which described a world with some serious problems.
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The world is still a very turbulent place today.
Now, in this age of AI, we live on a different kind of edge, specifically the AI edge, where AI applications are being deployed in devices throughout the physical world.
“It’s called ‘edge AI’ because the AI computation takes place close to the user at the edge of the network, close to where the data resides, rather than centrally in a cloud computing facility or private data center.” AI chipmaking giant Nvidia (NVDA) He said in a Blog post.
Nvidia said advances in edge AI have opened up opportunities for machines and devices, wherever they are located, to work with the “intelligence” of human cognition.
“AI-enabled smart apps learn to perform similar tasks under different conditions, just like real life,” the post read.
Micron technology (in) It is rapidly moving into the AI sector with new semiconductors designed to support generative AI applications.
In February, Micron announced a development deal with Nvidia to introduce high-bandwidth memory into its new H200 semiconductor. Micron says 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 reported 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 polled by FactSet had expected Micron to lose 25 cents per share on recent sales of $5.35 billion.
“Micron has returned to profitability and achieved positive operating margins a quarter ahead of the forecast period,” CEO Sanjay Mehrotra said. He told analysts During the company’s earnings call. “Micron has driven strong price increases as the balance between supply and demand has tightened.”
“This improvement in market conditions is due to a combination of factors including strong demand for AI servers, a healthier demand environment in most end markets and lower supply 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 were looking for earnings of 9 cents per share on sales of $6 billion.
Micron analysts adjust price targets
Several analysts on Monday revised 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 major beneficiary of rising high-bandwidth memory market share in cloud computing, and of the 12% to 15% annual increase in DRAM requirements to support computers and smartphones with artificial intelligence.
Edge AI “will slowly but surely complement core or data center AI hardware,” analysts said.
“It is certainly still early days and there are no necessary AI applications for phones and PCs,” the company said in a research note. “However, consumer hardware companies, regardless, will try to capitalize on increased consumer interest and the growing momentum of the software ecosystem to drive a faster upgrade cycle.”
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B of A said the same trend occurred with the rollout of 4G and 5G when devices with advanced hardware preceded the emergence of mobile applications such as Meta Platforms. (dead) Social media platform Instagram and ride-sharing service provider Uber (Uber) .
“While 4G/5G has ushered in the need for better modems/RF devices, we believe on-device AI will be even more 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 AI in the data center enables widespread adoption of cloud/enterprise AI, on-device or edge AI applications “promise faster performance (lower latency), personalization, privacy (your data stays on the device), and the ability “It helps offload the costs of AI reasoning (and power requirements) to the device.”
Cantor Fitzgerald analyst CJ Muse boosted the company’s price target on Micron to $180 from $150 and maintained an overweight rating on the stock.
Muse said he expects Micron to post a strong win and rise versus analyst estimates, with upside coming from both DRAM and NAND, while HBM chips will likely surprise to the upside as well.
The analyst said he expects these trends to continue in August quarter guidance as well, pushing consensus estimates higher 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 growing confidence in pricing trends for integrated DRAM/NAND memory products.
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