Micron Technology forecast first-quarter results ahead of Wall Street estimates and reported fourth-quarter revenue growth that was the highest in more than a decade on the back of booming demand for its memory chips used in the AI industry.

The company’s shares, which have gained about 12% this year, were up nearly 14% after the bell.

Micron is one of the only three providers of high-bandwidth memory (HBM) chips along with South Korea’s SK Hynix and Samsung, which has allowed the U.S. firm to cash in on demand for semiconductors that help power generative AI technology.

HBM is a space-saving, power-efficient type of dynamic random access memory chip, or DRAM, crucial for AI-focused graphics processing units, that aid in processing vast amounts of data.

“Demand from data center customers continues to be strong and customer inventory levels are healthy,” Micron CEO Sanjay Mehrotra said on a conference call with analysts.

The company said in June its HBM chips, used in the AI processors designed by Wall Street darling Nvidia, were sold out for the 2024 and 2025 calendar years with pricing already determined.

Micron expects to report record revenue of about $8.7 billion, plus or minus $200 million, in the first quarter and forecast a jump in gross margin to about 39.5% for the same period.

Analysts had expected revenue of $8.28 billion for the first quarter and adjusted gross margin of 37.7%, according to LSEG data.

The AI boom has also helped Micron cushion the hit from a memory chip inventory glut in PC and smartphone markets.

Personal computers infused with AI technologies are expected to have more memory chips, helping firms such as Micron.

AI PCs may have over 30% more DRAM and Microsoft’s push to have users shifting to Windows 11 from an older version, may expand the market, especially for commercial PCs in 2025, said Summit Insights senior research analyst Kinngai Chan.

Micron’s results typically set the tone for the chip sector as it reports ahead of peers and serves a broad client base spanning the PC, data center and smartphone industries.

“HBM, high capacity memory and flash storage, each of these three product categories will be multiple billions of dollars in revenue in 2025,” Micron’s Chief Business Officer Sumit Sadana said.

For the first quarter, the company forecast an adjusted profit of $1.74 per share, plus or minus 8 cents, compared with analysts’ estimates of $1.65.