00:00And right now we are two minutes away from the end of the trading day.
00:03Romain Bostic here with Katie Greifeld, taking you through to that closing bell with a global simulcast.
00:08Carol Masser and Tim Senevic join us now.
00:10Welcome to our audiences across all of our Bloomberg platforms, television, radio, and our partnership with YouTube.
00:16An eye on the broad market, Carol Masser, but also an eye on Micron, a stock that fell 13%, 14
00:21% yesterday.
00:22It's been all over the map today, up 3%, down 3%.
00:26And now we're going to have a moment of truth in just a few minutes when they report earnings.
00:30Yeah, it's a really good point.
00:31As you mentioned, down as much as almost 6% earlier in the session, down just about 1.4%.
00:36You know, what it says, capex spending, margin, like all these different things will matter.
00:42And whether or not it will give kind of a little bit of some juice maybe to that AI-infused
00:48trade, or does it kind of take some more of the air out of it?
00:50Speaking of juice, you guys are talking about what the stock did yesterday and what it did today.
00:53It's up more than 260% this year.
00:56Perspective, right?
00:57It's a lot of juice.
00:58That's a lot of juice.
00:59It's a lot of juice.
00:59I will say, though, when it comes to its earnings report, it does have a little bit of a volatile
01:04pass here.
01:05It's fallen on the day after earnings in five of the past six quarters.
01:08You take a look at the options pricing right now.
01:11It looks like we're priced for a swing of more than 10% in either direction.
01:15So even with all that juice that we've seen year to date, probably some more volatility on the way.
01:20Yeah, and we should point out we're talking about a company that's expected to report triple-digit revenue growth, triple
01:27-digit profit growth, and 80% gross margins.
01:30But as we've seen in the past, as Katie was just kind of alluded to, sometimes high expectations leads to
01:36disappointment.
01:37We do get the closing bells here in New York with the Dow Jones Industrial Average holding in the green
01:42up about 175 points or about three to four-tenths of a percent as we wait for these numbers to
01:47settle.
01:48The S&P 500 will finish in the red, down a tenth of a percent.
01:51The NASDAQ will finish in the red, down four-tenths of a percent.
01:54And the Russell 2000, Carol Master, will be up on the day by four-tenths of a percent.
01:59All right, good to know.
02:00Digging a little bit deeper into the S&P 500, you've got 321 names to the upside.
02:04Katie, 180 to the downside, two unchanged.
02:07You take a look at the sector level, a little bit more of an even split.
02:10Industrials, your biggest performer on the day, higher by more than one percent.
02:15Utilities and health care also seeing a relatively big bid here.
02:19In terms of what didn't perform, as you might expect, energy, down 1.7 percent as oil continues to slide.
02:27And then information technology as a sector, down about six-tenths of a percent, again, as we await those Micron
02:33results.
02:34I just want to point out for you into that, Carol, just so we get it out of the way.
02:37That Fed stress test of the major banks is out all 32 banks passing that annual stress test.
02:43All right, good to know.
02:43We're waiting for Micron.
02:44Expected to report any moment now.
02:46I'm just going to go to something that's not a chip company, but energy companies.
02:51We did see some of the solar companies rising in today's session.
02:55Sunrun was up as much as 31 percent in today's session, finished with a gain of about 12.5 percent.
03:01That's after the company announced a pact with Renew Home and Tesla to deliver more than 16 gigawatts of flexible
03:06energy capacity to hyperscalers and utilities.
03:10So there is a little bit of an AI trade in there.
03:13And you also saw Enphase up as much, up about 1.2 percent.
03:18Also want to take you to the home builders, which we did see a rally in today's session, a gain
03:22of more than 6 percent.
03:23This says President Trump canceled plans to sign that bipartisan bill aimed at lowering housing costs and increasing supply until
03:30Congress approves voting restrictions.
03:32Keep in mind that that bill did include a provision when it came to investors not being able to buy.
03:37We got Micron earnings.
03:38Micron earnings are out.
03:39The shares all over the map for the third quarter.
03:41It does look like results did come in above estimates here.
03:45But here's your forecast, what everyone is focused on.
03:47Fourth quarter adjusted revenue, 49 to 51 billion.
03:50The street was looking for 43.
03:52So a big guide above what the street was looking for for the fourth quarter on the revenue side.
03:57The company also saying that for the fourth quarter, that's the current quarter that we're in right now, gross margin
04:02will be 86 percent.
04:03That's an expansion.
04:04And that's also above street estimates.
04:06They were looking for roughly about 84 percent on the gross margin side.
04:11Micron also saying that its customer base is rapidly growing and it is seeing an increase in demand.
04:16I do just want to circle back to the third quarter numbers.
04:18The quarter that just passed, it does look like a beat on that front as well.
04:22The bottom line number, third quarter adjusted EPS, $25.11.
04:26The street was looking for basically $20.49 on the revenue side as well.
04:32Katie, also a beat there at about $41.46 billion.
04:36The street was looking for roughly about 36.
04:38So a beat when it comes to their third quarter adjusted EPS.
04:41Also a beat when it comes to their third quarter adjusted revenue coming in at $41.46 billion,
04:47healthily above the estimate of $35.69 billion.
04:51You can see the shares moving higher after hours,
04:53especially when you take a look as Romain walked through that fourth quarter look ahead
04:58for adjusted revenue, a range between $49 billion to $51 billion.
05:03The midpoint of that well above the estimate heading into this print,
05:06which was $43.24 billion, Carol.
05:10Got to say the adjusted gross margin, that's a big and important number for this company.
05:1384.9% versus 39% year over year.
05:17The estimate was 81.9%.
05:19We should expect to see margin expansion.
05:21This is something we talked about with our man, Deep Singh,
05:24this idea that the demand has been out there, the costs have been higher.
05:27So you would expect to see that increased level of profitability and certainly margins increasing.
05:33The chairman, president, and CEO of Micron, Sanjay Mehrotra, saying the record fiscal third quarter financial results
05:40and even stronger outlook for the fourth quarter reflect the strategic value of memory in the AI era.
05:46Yeah, I mean, I really focused on this margin number for the current quarter, 86% versus 83.6%.
05:52That expanded.
05:54Fourth quarter adjusted revenue coming above estimates $49 billion to $51 billion.
05:58We're also getting some more granularity when it comes to other parts of the business.
06:03Not as important to the stock move and to investors, but third quarter mobile and client revenue coming above estimates.
06:09Third quarter core data center revenue coming above estimates.
06:12Third quarter cloud memory revenue coming in above estimates.
06:15Fourth quarter adjusted EPS, once again, $30 to $32.
06:19That's the outlook.
06:21The estimate was for $25.31.
06:23Shares up 3.5%.
06:25It's a lot, but not really.
06:27When you look in the context of the move that the company, that the stock has made this year.
06:31Yeah, and of course, a lot of people are really kind of keeping a lookout also for those higher end
06:35chips.
06:36These are the HBM chips.
06:38They do say in the release that it is in high volume shipments for its lead customers platform
06:45and says that qualification samples have been shipped to multiple end customers as well.
06:50So that would be the longer term growth story here.
06:53The company is saying that production on that is well underway and that it does expect volume production on that
07:01HBM4 e-chip in calendar year 2027.
07:05And we know when it comes to those HBM chips.
07:08I mean, that's a market that's really controlled by SK Hynix.
07:11According to CounterPoint Research, SK Hynix controls about 58% of global market share there.
07:17Samsung Micron had about 21 apiece, according to that research firm.
07:22So it's going to be interesting to see what that longer term growth story looks like, to Romaine's point.
07:27I do want to point out, I mean, shares really extending after hours right now, higher by 6% on
07:33top of the enormous gain we saw year-to-date coming into today.
07:37I want to point out, though, that when it comes to their valuation, Micron shares are still priced at less
07:42than 10 times estimated earnings.
07:45So from that perspective, you could make the case that maybe they look inexpensive still.
07:50We should also point out that most of the chip space now, which was down in the cash session, Carol,
07:56all moving higher in the after hours.
07:58SanDisk up about 4.5%.
08:00Western Digital getting a strong bid.
08:02LAM Research, Credo, Qualcomm, and the like.
08:05What about Cerebris?
08:08Is it kicking up in the after hours?
08:10Hey, Dina Bass of our Bloomberg News team doing a quick write-through on these numbers and saying, reminding us,
08:17Micron, the largest U.S. maker of computer memory chips, delivering that sales forecast.
08:21The top Wall Street estimates after AI-fueled shortages of the components and prices soaring.
08:27So, again, revenue will be approximately $50 billion in the fiscal fourth quarter, which runs through August.
08:33Analysts had an estimated about $43.2 billion on average.
08:35Ex-some items profit will be about $31 a share compared with a projection of $25.31.
08:41And, again, we've talked and highlighted their margin outperformance, which is so important here, certainly when it comes to what
08:50we see.
08:51And a third-quarter adjusted gross margin, 84.9%.
08:53Estimate on the street was 81.9%.
08:56Stock now up about 8.5% here in the after market.
08:59So the momentum, the upward momentum, increasing here in the after hours.
09:03Yeah, remember what this is about.
09:04It's about AI.
09:05It's about that spending spree from the data center operators that has stoked the appetite for conventional memory, but also
09:13high-bandwidth memory, which works with AI systems.
09:16So this is why investors are looking at it so closely.
09:19Cameron Christ writing today, this is the third most important company in the world after NVIDIA and Alphabet.
09:25All right, guys, we wrap.
09:26It's the third biggest waiting in that Aztec 100.
09:28Yeah, it's a big one, right?
09:30Again, the stock just off its highs here in the after market.
09:33Micron shares still up about 7.5%.
09:35It's a big one.
Comments