00:00 Speaker A
Walk us through some of those results, but especially that Q4 guidance that really seems to be boosting analyst outlook here.
00:09 Speaker B
Yeah, look, and it's the magnitude of the beat that really uh is driving this stock higher, um that it shocked investors. The fiscal fourth quarter revenue guidance coming in at 50 billion versus estimates for 43 billion dollars. Also earnings guidance of $31 a share. Uh the expectation was a little bit more than $25. and their gross margin, their adjusted gross margin, that topped 84, it came in 84.9%. That beat estimates of 81.83%. So just the sheer beat of all of this has been driving this uh stock higher. And also the fact that they're saying that there's no line in sight of when supply catches demand. So, that speaks to pricing power. This is all of what the street wanted to hear, a pristine report and guidance.
01:16 Speaker A
Tom, is this boosting optimism around that AI trade again?
01:22 Tom
Absolutely. You know, over the past couple days, you've you've sort of the market has gotten itself in sort of a negative feedback loop, right? Saying is this sustainable? Can the spending continue? Is there enough capital to continue to to to fund all this? And Micron came out and basically said, yes, yes, there is. And that's turning sentiment around. The most important part of the Micron earnings were really their referencing these strategic customer agreements. The the whole key around the memory boom, much like inflation honestly, is is it a flash in the pan or is it sustainable? Micron is growing earnings at like hundreds and hundreds of percent, but the stock only trades at a 10X forward multiple. The S&P 500 trades at a 20X forward multiple and isn't growing earnings nearly as fast. The reason Micron and Nvidia are cheap is because investors are concerned that this earnings boom won't last. If earnings, if investors believe it will last, which Micron's earnings helped, you know, reinforce that idea, then this market has a lot more room to run.