Micron Technology forecast third-quarter revenue above Wall Street estimates on Thursday, signaling strong demand for its high-bandwidth memory (HBM) chips used in AI models, sending its shares up 2% in after-hours trading.

Micron said its sales growth was primarily driven by its newest high-bandwidth memory chips, which have become a key component of high-end AI servers. During the quarter, sales of HBM chips surpassed the $1 billion milestone for the first time, up 50% from the prior quarter.

Micron Technology Inc., the largest US maker of computer memory chips, dropped in premarket trading after the company reported that margins will miss analysts’ estimates this quarter.