Shares of Micron (NASDAQ:MU) surged over 6% through early morning trading on Tuesday one day after the chipmaker announced a major deal with Intel (NASDAQ:INTC) . Micron also said it would buy back billions of dollars of its shares at an analyst and investor event in New York City.
Micron and Intel announced that they will produce and ship the “industry's first 4bits/cell 3D NAND technology,” according to a Micron company release. The two tech giants also said they have made progress on the development of the third-generation 96-tier 3D NAND structure, which provides a 50% increase in layers.
"We're continuing flash technology innovation with our 96-layer structure, condensing even more data into smaller spaces, unlocking the possibilities of workload capability and application construction," Micron executive Scott DeBoer said in a statement.
Micron also said it would repurchase $10 billion of outstanding common stock as part of a new plan to return at least 50% of free cash flow to stockholders starting in fiscal 2019. “The data-driven economy will transform nearly every industry, and drive secular growth in demand for memory and storage," CEO Sanjay Mehrotra said.
“Our business results have dramatically strengthened Micron's balance sheet and this stock buyback program emphasizes our ongoing commitment to enhancing shareholder value.”
These moves come after Micron also upped its quarterly guidance on Monday. The company now expects sales in the quarter to be in the range of $7.7 billion to $7.8 billion, up from previous guidance set at $7.2 billion to $7.6 billion.
Shares of Micron had skyrocketed 98% over the last year and 13% during the last four weeks, before Tuesday’s gains.
Looking further ahead, our current Zacks Consensus Estimates are calling for Micron’s full-year revenues to surge 43.8% to reach $29.22 billion. Meanwhile, the company’s bottom line is projected to soar 122.6% to hit $11.04 per share.
Micron has also become rather popular among value investors, with the chip designer trading at just 5.4X forward 12-month earnings estimates.
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Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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