(Bloomberg) — Micron Technology Inc., the largest US maker of computer memory chips, declined in late trading after its forecast failed to meet the sky-high expectations of some investors.

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Fiscal fourth-quarter sales will be $7.4 billion to $7.8 billion, the company said in a statement Wednesday. While the average analyst estimate was $7.58 billion, some projections were above $8 billion. Profit will be about $1.08 a share, minus certain items, versus a projection of $1.02.

Though Micron is getting a boost from the AI computing boom, demand is still sluggish in its traditional markets, such as personal computers and smartphones. Those areas are only beginning to recover from a historic slump last year.

The shares fell about 8% in extended trading. Micron had rallied 67% this year before the close, lifted by investor expectations that it will be one of the main beneficiaries of AI spending.

In the third quarter, which ended May 30, Micron’s revenue rose 82% to $6.81 billion. The Boise, Idaho-based company reported a profit of 62 cents a share, excluding certain items. That compares with estimated sales of $6.67 billion and a projected profit of 50 cents a share.

In a slide presentation, the company said that PC unit volumes remain on track to increase by a percentage in the low single digits in calendar 2024. Smartphone units will gain by a low- to mid-single-digit range. The company expects AI features to help spur demand for phones and PCs heading into 2025.

Chief Executive Officer Sanjay Mehrotra has promised that 2024 will mark a rebound for the industry, and that 2025 will see record sales levels. AI will drive demand for expensive chips that are more difficult to make and use an outsized portion of production resources. That should reduce the risk of future inventory gluts — a longtime bane of the memory industry.

Micron sells a vital component of AI hardware — high-bandwidth memory — giving it a boost from the surge in AI spending. The company’s parts work with processors from Nvidia Corp., which has become the world’s most valuable chipmaker thanks to insatiable demand for its products. The memory can serve up information more quickly, helping computing systems develop and run AI models.

AI models are created by bombarding software with information. The process can involve trillions of parameters and is highly reliant on memory semiconductors. In order to avoid bottlenecks and keep expensive processors working flat out, Micron and its competitors have developed chips that communicate with other components much faster than traditional memory.

Micron competes with South Korea’s Samsung Electronics Co. and SK Hynix Inc. in selling chips that provide short-term memory in computers and phones. They also makes flash memory, which handles longer-term storage in those devices.

(Updates share reaction in fourth paragraph.)

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