Micron Technology delivered stronger-than-expected fiscal third-quarter results and issued a bullish outlook for the current quarter.
The memory-chip maker’s shares jumped about 16% in early Thursday trading as investors welcomed continued demand from the artificial intelligence industry.
The rally added more than $200 billion to Micron’s market value and reinforced confidence in the broader AI semiconductor sector.
Micron Earnings Beat Wall Street Forecasts
For the quarter ending May 28, Micron reported adjusted earnings of $25.11 per share.
That result comfortably exceeded the Wall Street estimate of $20.49 per share.
Quarterly revenue reached a record $41.46 billion, beating analysts’ forecast of $35.69 billion. Revenue also increased sharply from $9.30 billion during the same period a year earlier.
Micron CEO Sanjay Mehrotra said the record results demonstrated the strategic importance of memory products in the AI era.
Strong Guidance Fuels Micron Stock Rally
Micron also issued guidance that came in well above market expectations.
The company expects fiscal fourth-quarter revenue of between $49 billion and $51 billion. Analysts had projected revenue of approximately $43.24 billion.
Micron forecast adjusted earnings of $30 to $32 per share, compared with Wall Street expectations of $25.31.
The stronger outlook suggests that AI-related demand for memory and storage products remains robust.
Gross Margin Forecast Beats Expectations
Micron also challenged concerns that its profit margins may have already peaked.
The company expects a gross margin of approximately 86% during the upcoming quarter. That forecast is considerably higher than the consensus estimate of 81.9%.
High-bandwidth memory pricing and tight supply conditions have strengthened Micron’s profitability.
Jake Behan, head of capital markets at Direxion, said HBM pricing power is helping reset Micron’s earnings outlook at a much higher level.
Analysts Raise Micron Price Targets
Raymond James analyst Melissa Fairbanks raised her Micron price target to $1,500 per share following the earnings report.
Fairbanks said analysts were running out of superlatives to describe the company’s performance.
Bank of America analyst Vivek Arya said the results supported a positive view of memory’s importance within the AI market.
Arya also highlighted stronger supply discipline, which could support a more durable memory-chip cycle.
AI Demand Keeps Memory Supply Tight
Micron continues to benefit from rising demand and limited supply across the global memory industry.
Data center operators require increasing amounts of advanced memory to support AI training and inference workloads.
This demand has pushed up prices for memory components used in data centers, smartphones, laptops and other consumer electronics.
Micron products are also important components within AI systems powered by processors from companies including Nvidia and Alphabet.
Supply Constraints Could Continue Beyond 2027
Micron management expects tight memory supply conditions to continue for several years.
Mehrotra said AI-driven demand across multiple market segments, combined with structural supply limitations, could keep conditions tight beyond calendar year 2027.
Deepwater Asset Management analyst Gene Munster said the comments were positive for the AI investment theme.
He suggested that demand could continue exceeding available supply into late 2028 or even 2029.
Micron Market Value Surpasses $1 Trillion
Micron shares have risen by more than 700% over the past year as investors increasingly recognize the company’s role in AI infrastructure.
The rally has helped Micron surpass a market capitalization of $1 trillion.
Investors had previously questioned whether the rapid growth in memory demand could continue. However, Micron’s latest results and long-term customer agreements have reduced some of those concerns.
Strategic agreements and expanding HBM production provide greater visibility beyond the next memory-pricing cycle.
Micron Expands Its AI Memory Portfolio
Micron reported continued progress across its AI-focused product lineup.
The company is shipping large volumes of HBM4 memory for a major customer platform. It is also developing its next-generation HBM4E products.
Micron has expanded production of advanced solid-state drives and LPDDR5X memory products.
These technologies support AI servers, data centers, mobile devices and other high-performance computing systems.
Record Investment Supports Future Growth
Micron invested approximately $7.1 billion in capital expenditures during the quarter.
The company also generated adjusted free cash flow of $18.3 billion.
Management said Micron is investing at record levels in technology, new products and manufacturing capacity to meet rapidly growing customer demand.
Its multi-year strategic customer agreements are expected to improve the predictability and durability of future financial performance.
Micron Declares Quarterly Dividend
Micron’s board declared a quarterly dividend of $0.15 per share.
The dividend is scheduled to be paid on July 21.
Although the dividend remains modest compared with Micron’s share-price gains, it provides an additional return for long-term shareholders.
Wall Street Sees More Upside in the AI Chip Cycle
Wedbush analysts described Micron’s results as a major positive for technology investors.
The firm said the earnings report confirmed that the memory and semiconductor trade remains strong.
Wedbush also believes the AI-driven chip cycle may still be in its early stages.
Micron’s future performance will depend on memory pricing, production capacity and the durability of AI infrastructure spending. However, its latest earnings and guidance indicate that demand remains well ahead of current supply.
