Kim Forrest, Bokeh Capital Partners founder and CIO, reacts to Micron's upbeat forecast. Micron said fiscal fourth-quarter revenue will be roughly $10.7 billion, well ahead of the $9.89 billion average analyst estimate.

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Micron has projected fiscal fourth-quarter revenue of approximately $10.7 billion, exceeding the average analyst estimate of $9.89 billion. This optimistic outlook is attributed to strong demand for high bandwidth memory chips, which are essential for AI and data center infrastructure. The company is already booking orders for the following year, indicating confidence in sustained demand.

Industry observers highlight that while high bandwidth memory is a significant growth driver, Micron's legacy chips also play a role in the broader market. The ongoing expansion of AI and connected devices is expected to keep semiconductor demand high, with potential investment opportunities extending beyond chip manufacturers to include telecom companies that support data transfer for these technologies.

What Micron's upbeat forecast signals for tech stocks

All right. Kim let's first start with the quarter. That was I mean we were expecting strength largely because of this golden wave if you will of infrastructure. Were these numbers in line with what you were expecting. Kind of. But I think they really eclipsed what I had thought they could do in this quarter. Remember the chips that are driving their earnings higher sold out for the end of this year which is next quarter. So they're already booking next year's 2026 you know high bandwidth memory orders. And it looks like they're confident enough to be able to deliver these products and raise their earnings even more in the next quarter. And I think that bears well for whatever is going to happen after that. Well this is I'm curious about. As you know a lot of the negative Nancy's out there are really sort of looking for any canary in the coal mine that would sort of knock this data center A.I. boom off its rocker here. When you look at what micron has to say today does that give maybe some ratification to the idea that there is a lot more room left in this data center build out this A.I. infrastructure build out. And how long how much of a runway do you see. That's that is a tricky question. Your second question is how long we. Nobody really knows. And here's why. While I believe that we are in ways baseball terminology maybe the second or third inning at this point we don't know how fast the game is going to go. Right now companies are building the large language models and large reasoning models which as the name implies are large and they take tons and tons of data center space to make it to build these models. But my worry is like I don't really understand how many of these we're going to actually need because companies are going to start building their more tailored models on top of these things. So that's the big question is what does A.I. really look like in the next five years. And nobody knows. But I know one thing it's probably not going to look like we think it is right now. It never does. It never does. So where does that leave a company like Micron. I know that when we're talking about the A.I. story it's very much a high bandwidth memory chips but they also have legacy chips as well. And the high bandwidth memory chip is just a small part of its business. So even though that part of the market that part of its business is seeing high growth where does that leave the legacy chips and how much it leverage it has on that front. Well that's a great question. And I think the roller coaster of anybody that has been an owner of Micron can answer that that this is a really constrained little area of the chip manufacturing. They there's only a handful of companies that make that NAND and DRAM. So whenever somebody brings on new capacity it kills the pricing of the whole environment. So I think that will continue probably. But I also believe not only is a data center going to drive demand but you know what we're going to want to have more real devices connected to these data centers that are not only feeding the data centers with information to process but also answering questions about how should this pipeline run and all of the questions that things are going to hook up. You know real life computers are going to hook up out in the world. And Micron and even companies like old or AMD's older products and God forbid Intel's products they might be used out in the world not in the data center. So it looks like semiconductors are going to be a hot item for the next I don't know how long a long time. If I mean we saw NVIDIA today reclaim its record highs making that round trip back. And of course Micron has more than doubled at this point since President Trump paused the tariffs. If you're an investor in these names and you don't want to be adding to those positions but you want to buy into the A.I. story do you then go to an AMD or an Intel. The legacy chip makers. Probably not. I think that people who are in AMD right now I'll be a psychologist here are probably momentum lovers. So they're going to try to find things that are more like Micron that are driven by momentum. Right. Even though they're somewhat limited. And I think we see that in after hours market with the other NAND and DRAM players that are public Western Digital. And I forget the other one. Sorry I drew a blank. But you know I think the more momentum names will probably get the love. But I think investors investors who are a little patient might want to look further down the semiconductor chain to continue to play in this area because this is where the chips are going to go. As I said we need you know it's not just people asking questions on iPhones and you know Android phones. It's going to be devices talking to each other. And that machine chatter is going to drive a whole bunch of investment not only in computing but also bandwidth. So I would look into telecoms as well because you know we have to get the information to and from the data center. And that would be telecoms.

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