Micron Technology soars as AI boom drives memory chip shortage and record earnings

The AI boom comes to memory chips. What analysts are saying after Micron's blowout quarter

Micron Technology is likely to get a big boost over the coming year if its blockbuster fiscal first-quarter results are anything to go by, even as some investors shrink from the AI trade, according to several Wall Street researchers. Micron shares rose almost 16% in early trading Thursday after the Idaho-based computer memory and storage company posted top and bottom-line results that topped Wall Street estimates in its November quarter. The semiconductor makers earned an adjusted $4.78 per share on revenue of $13.64 billion, topping analysts' consensus expectations of $3.95 on $12.84 billion, according to LSEG data. Led by CEO Sanjay Mehrotra, Micron also gave stronger-than-expected forward guidance, forecasting earnings of $8.42 per share on revenue of $18.7 billion in its fiscal second quarter, executives told investors. The bullish outlook drove Wall Street firms to raise their own estimates for Micron, with many analysts pushing up their 12-month price targets on the stock to $300 or more. "All told, tonight's results reaffirm our structural thesis on MU, and we continue to see the company as strongly positioned to continue benefiting from the ongoing memory super-cycle, especially given its strong execution and unique ability to prioritize profitability over market share," Deutsche Bank analyst Melissa Weathers said Wednesday in a client note. UBS analyst Timothy Arcuri echoed that optimism. "MU reported strong results and guided well above even our high-end Street and any of the investor bogeys we heard into the call. Forward commentary also suggests gross margin will continue to move higher through C2026 - enough of a runway for the bias on the stock to remain to the upside," Arcuri wrote Thursday. Here's what Wall Street is saying about Micron: Bank of America: buy rating, $300 price target The bank raised its rating on Micron to buy from neutral, increasing its share price target to $300 from $250, implying 33% upside. "We are changing our view about 1) durability of the memory cycle (persists into CY26E on restrained supply additions and AI demand and [high bandwidth memory] 3x by CY28E), and 2) quality of MU's balance sheet (30% FCF margin, net cash positive, can start to buyback stock significantly in another year as Chips Act requirements get over)," analyst Vivek Arya said in a note to clients. UBS: buy, $300 UBS raised its price target on buy-rated Micron to $300 from $295. "A momentum investor would rightly argue that this is as good as it gets in terms of upward revisions, but memory is becoming a key strategic asset in an AI-driven world and we think the cycle proves more durable than traditional consumer-led cycles so we are not getting off this train yet. Net, we raise C2026 to ~$41 and C2027 to ~$42 and PT from $295 to $300," Arcuri wrote. Wells Fargo: overweight, $335 The bank hiked its price target on overweight-rated Micron to $335 from $300, suggesting almost 50% upside from Wednesday's close. "MU's results + guide reinforce positive thesis - HBM sustainability, demand > supply beyond CY26 (MU meeting half to two-thirds of demand at several key customers), and tech / portfolio execution. PT to $335 (9x increased CY27 EPS @ $37.40/sh.)," analyst Aaron Rakers wrote Wednesday in a client note. Deutsche Bank: buy, $300 The bank, which has a buy rating on Micron, raised its share price target to $300 from $280. "On much higher estimates (CY26 EPS rises to ~$39; CY27 EPS rises to $46.80), we raise our P/T to $300, on what we view to be a refreshingly low P/E multiple of ~6.4x our CY/27E EPS," Weathers said.

Micron crushes expectations on earnings, revenue and guidance amid soaring AI memory demand - SiliconANGLE

Micron crushes expectations on earnings, revenue and guidance amid soaring AI memory demand Memory chipmaker Micron Technology Inc. crushed Wall Street's expectations on earnings and revenue and offered jaw-dropping guidance for the current quarter as it delivered its latest financial results, sending its stock higher in extended trading. The company reported first-quarter earnings before certain costs such as stock compensation of $4.78 per share, easily beating the Street's forecast of $3.95, while revenue jumped 57% from a year ago to $13.64 billion, well ahead of the $12.84 billion estimate. With those numbers, it was hardly surprising to see Micron's overall profit soar - it ended the quarter with net income of $5.42 billion, up from just $1.87 billion in the year-ago period. Micron Chief Executive Sanjay Mehrotra (pictured) said on a conference call with analysts that the rapid growth in artificial intelligence data center capacity is driving a significant increase in demand for high-performance and high-capacity memory and storage. "Server unit demand has strengthened significantly," he said, adding that he expects growth in the "high teens" this year. That demand is unlikely to let up anytime soon, and so Micron's guidance was uncharacteristically bullish. For the current quarter, it said it's looking at earnings per share of around $8.42 at the midpoint, crushing the Street's forecast of $4.78 per share. It's also projecting revenue of $18.7 billion at the midpoint, well ahead of the $14.2 billion analyst estimate. Investors quickly made their approval known, as Micron's stock gained more than 8% after-hours. "Our outlook reflects substantial records across revenue, gross margin, earnings-per-share and free cash flow, and we anticipate our business performance to continue strengthening through fiscal 2026," Mehrotra told analysts. Micron is a manufacturer of solid-state storage drives and memory chips that have become fundamental components in everything from personal computers to smartphones and vehicles, but their most important application now is in AI servers. The company is one of just three in the world, along with Samsung Electronics Co. Ltd. and SK Hynix Inc. in South Korea, which manufacture so-called "high-bandwidth memory chips" that have become essential for AI model training and inference tasks. Its customers include Nvidia Corp. and Advanced Micro Devices Inc., which need vast amounts of memory for their graphics processing units. With the rapid data center buildouts of companies such as OpenAI Group PBC, Google LLC, Microsoft Corp., Oracle Corp. and every other major AI player, the industry is facing an acute shortage of HBM chips, which are being bought up faster than they can be manufactured. That's why Micron's stock has soared over the past year, and is now up more than 168% in 2025. Mehrotra told analysts on the call that he expects the market for HBM chips to continue growing for the foreseeable future, and forecasts its value to increase from $35 billion this year to $100 billion by 2028. He added that the supply of these components is going to fall "substantially short" of demand throughout that period. During the quarter, Micron generated $5.2 billion in revenue from cloud memory sales, up more than 50% on an annual basis. It also reported $2.38 billion in core data center sales, up just 4% from a year earlier. Both business units benefitted from higher pricing. The shortage of memory chips has become so acute that Micron made the decision earlier this month to stop selling products directly to consumers, meaning it will quit manufacturing devices such as external storage drives that are often used by gamers to enhance the performance of their PCs. It took the decision in order to be able to preserve its supply of memory chips for AI and data center customers.

Not All AI Stocks Are Falling These Days. Micron Is Rising on Strong Earnings

Worries about an AI bubble have weighed on the tech sector lately. Micron is still riding the AI boom higher. Shares of the memory chip maker were up over 5% in extended trading Wednesday after the company posted earnings that blew past analysts' estimates, driven by growing demand for AI hardware. Micron Technology (MU) posted adjusted earnings per share of $4.78 for the fiscal first quarter, well above the $3.96 analysts surveyed by Visible Alpha were looking for. Its revenue jumped nearly 60% year-over-year to a record $13.64 billion, also exceeding expectations. "Micron delivered record revenue and significant margin expansion at the company level and also in each of our business units," said CEO Sanjay Mehrotra, who called the company an "essential AI enabler." Micron projected adjusted earnings per share of $8.22 to $8.62 on revenue of $18.3 billion to $19.1 billion for the second quarter, well ahead of consensus estimates. Micron's stock, though well off record highs seen earlier this month, has largely avoided the worst of the recent slump in the AI sector. It's continued to benefit from a shortage in the memory market, supporting stronger pricing and higher margins. Micron's GAAP gross margin jumped to 56% in the first quarter, up from around 38% a year earlier, with the company saying it expects that to climb as high as 68% in the current quarter. Shares of Micron have nearly tripled in value in 2025 through Wednesday's close, making it one of the top-performing stocks in the S&P 500 for the year.

Micron surges as global memory chip shortage boosts profit forecast

Micron Technology shares saw a significant jump. The company issued a strong profit forecast. This is due to a worldwide shortage of memory chips. Demand from AI data centres is very high. This shortage is boosting prices for memory chips. Micron expects memory markets to remain tight past 2026. Supply shortages could extend beyond company estimates. Micron Technology shares rose nearly 14% in premarket trading on Thursday, following an outsized profit forecast on the back of a worldwide supply crunch of memory chips amid robust demand from AI data centres. A memory shortage across industries - from smartphones to sprawling data centres - has boosted prices, helping Micron forecast second-quarter adjusted profit at nearly double of Wall Street expectations. "Tight memory supply caused by immense artificial intelligence infrastructure demand is boosting incredible market pricing for Micron and its memory chip peers," Morningstar analysts wrote in a note. "The current cyclical upswing is generating tremendous shareholder value." Micron is one of only three major suppliers of high bandwidth memory (HBM) chips, alongside South Korea's Samsung and SK Hynix. The chips are pivotal for training and deploying generative AI models. Micron's share price has risen over 160% this year, while Samsung and SK Hyninx's South Korea-listed shares have more than doubled and tripled in value, respectively. Micron is set to add over $30 billion to its market capitalization, if premarket gains hold. In a conference call with investors on Wednesday, Micron CEO Sanjay Mehrotra said he expects memory markets to remain tight past 2026. Memory is a highly cyclical industry, characteristically experiencing extreme downturns and highs with volatile pricing levels. While analysts differ in their estimates of how long the ongoing upturn, routinely referred to as the "supercycle", might last, Wall Street unanimously agrees supply shortages could extend beyond Micron's estimates despite efforts to bring on more capacity. The memory chip maker has been retooling its production facilities to prioritize surging demand from AI data centres. It also increased its 2026 capital expenditure plans to $20 billion, as it ramps up investments to meet booming demand. Though Morningstar analysts expect robust pricing to diminish in the long term, they see supply tightness persisting well into 2027. J.P. Morgan analysts also expect the supply shortage to last through 2027. Micron has to strike a balance between allocating wafer capacity to high margin HBM while also providing adequate supply to key customers in other, lower-margin industries, J.P. Morgan analysts said.

Micron: The 'Age Of AI' Winner With 'Meaningful Upside' - Micron Technology (NASDAQ:MU)

Micron Technology (NASDAQ:MU) shares soared on Thursday after the company reported first-quarter financial results and guidance. Analysts see further upside and are raising their price targets. Micron Technology stock is charging ahead with explosive momentum. What's behind MU gains? The Micron Analysts: JPMorgan analyst Harlan Sur reiterated an Overweight rating on Micron and raised the price target from $220 to $350. Goldman Sachs analyst James Schneider maintained a Neutral rating and raised the price target from $205 to $235. Needham analyst Quinn Bolton reiterated a Buy rating with a price target of $300. Rosenblatt analyst Kevin Cassidy maintained a Buy rating and raised the price target from $300 to $500. KeyBanc analyst John Vinh maintained an Overweight rating and raised the price target from $215 to $325. Wedbush analyst Matt Bryson reiterated an Outperform rating and raised the price target from $300 to $320. Cantor Fitzgerald analyst CJ Muse reiterated an Overweight rating and raised the price target from $300 to $350. Read Also: Micron Says The Best Is Yet To Come After Record Q1 JPMorgan on MU: Sur highlighted Micron's strong beat and raise in the first quarter, with artificial intelligence demand helping strong memory demand. "Results were strong and guidance was even better," Sur said. The analyst said Micron has a proven record of execution and could capture additional market share in the memory space, along with higher average selling prices. "We believe the fundamental setup (pricing/demand) remains favorable through CY26 and into CY27." Goldman Sachs on MU: Schneider said Micron shares will likely move higher in a new investor note, citing the company's strong guidance. "We expect Micron to continue executing on its HBM product roadmap, capturing roughly 20% share of a fast-growing, high-margin market," Schneider said. The analyst sees a balanced risk/reward for Micron stock at the current share price. "Would consider being more constructive on the stock if we see continued supply growth discipline continuing across the industry into 2027." Needham on MU: Robust demand for DRAM and NAND led to strong results and guidance ahead of analyst estimates, Bolton said in a new investor note. "HBM momentum continues as the company reached another quarterly record," Bolton said. The analyst expects Micron to maintain its HBM market share going forward. Rosenblatt on MU: Newly negotiated prices for DRAM and NAND help Micron provide strong guidance, Cassidy said in a new investor note. Cassidy increases earnings per share estimates to $36 for fiscal 2027 and using a 14x price-to-earnings ratio to reach a price target of $500, one of the highest from an analyst. "We continue recommending MU for the increasing importance of memory and storage in the Age of AI," Cassidy said. KeyBanc on MU: Strong demand for AI and data centers from customers could result in a "perfect storm" for Micron, Vinh said in a new investor note. "Outsized demand for AI/Data Center is driving a super cycle in memory with demand exceeding supply," Vinh said. The analyst said this is leading Micron to see higher demand and prices. Wedbush on MU: After a strong first quarter and guidance that beat estimates, Bryson asks, "how good can it get" for Micron. "Apparently pretty darn good!" Bryson says of Micron's quarter and guidance. The analyst said Micron is accelerating its timeline to reach mid-70s gross margins, which should boost earnings per share. "The stock is now trading well below what we view as typical multiples on peak earnings, and our view that our model likely has room for more upside over the next few quarters, we see no reason to temper our optimism." Cantor on MU: Micron may have channeled its inner Nvidia with a huge guidance given after earnings, Muse said in a new investor note. The analyst said this may have been a "mic drop" moment. Micron is part of a memory Supercycle that is seeing demand disruptions, the analyst added. "We see no reason why we cannot see peak multiple approaching the low teens territory. All of which sets up for still meaningful upside for shares." Muse said with 40% or more upside potential for Micron shares, the stock is a top pick. MU Price Action: Micron stock was up 10.2% to $248.55 on Thursday versus a 52-week trading range of $61.54 to $264.75. Micron shares are up 187.4% year-to-date in 2025. Read Next: Micron Q1 Preview: Record Quarter Predicted By Analyst -- 'We Recommend Owning The Stock' Photo: Shutterstock MUMicron Technology Inc$248.4010.2%OverviewMarket News and Data brought to you by Benzinga APIs

What AI Bubble? This Chip Stock Just Said the AI Boom Is Alive and Well | The Motley Fool

The memory-chip leader crushed analyst estimates in its after-hours report on Wednesday, offering a forceful case that the AI boom is alive and thriving. Micron's revenue jumped 57% in the first quarter, accelerating from its previous quarter to $13.6 billion, which was well ahead of expectations at $12.9 billion. Management credited "AI demand acceleration" and its own execution for record Q1 results and its highest-ever free cash flow. Micron's profits also soared as gross margin expanded from 38.4% a year ago to 56%, and operating margin jumped from 25% a year ago to 45%, its highest rate in seven years. Adjusted earnings per share climbed from $1.79 to $4.78, well ahead of the consensus at $3.94. The stock was up 8% after hours on the news. The wider margins show the company is benefiting from both higher prices and more advanced chips, including high-bandwidth memory (HBM), which is used for AI computing. The company reorganized its business to capitalize on the AI boom, and it seems to be paying off. The unit with the most exposure to AI, cloud memory, saw revenue double in the quarter to $5.3 billion, and delivered an operating margin of 55%, showing how big of a driver AI has become. In fact, Micron's guidance was even more bullish both for itself and the broader AI market. The company forecast HBM total addressable market (TAM) compound annual growth rate (CAGR) of 40% through calendar year 2028, from $35 billion in 2025 to around $100 billion in 2028. In other words, Micron expects the market for AI memory chips to triple over the next three years, and pulled the $100 billion target forward by two years earlier than its previous outlook. The company's guidance for the fiscal second quarter called for revenue around $18.5 billion, smashing the consensus at $14.4 billion, and it sees adjusted earnings per share jumping to around $8.42, nearly double estimates at $4.71. That forecast was driven by greater demand than supply for both DRAM, which includes HBM, and NAND, as well as higher prices, lower costs, and a favorable product mix. A bifurcation seems to be taking place in the AI sector. Chip stocks like Micron and Nvidia continue to post blistering results with soaring revenue and profits as they benefit from strong demand for AI chips and limited supply. However, in the AI infrastructure sector, which includes companies like Oracle as well "neocloud" companies like CoreWeave (CRWV 7.12%) and Nebius (NBIS 6.79%) that are building and operating AI data centers, there's some concern that those companies have gotten out over their skis, and are spending money too fast without enough clarity that it will turn into profit. Oracle stock has tumbled over the last week as the company's free cash flow turned negative due to its data center buildout, and skepticism mounted that it wouldn't hit the sky-high targets it had given investors earlier in the year. Nebius and CoreWeave are in a similar predicament. As a result of those growing risks, Oracle stock is now down 46% from its peak a few months ago, while CoreWeave has lost 65%, and Nebius is off 45% from its high. What those companies are trying to accomplish is different from what chip-makers like Nvidia and Micron are doing. AI infrastructure is a much longer and higher-cost bet than making chips, and there's significantly more risk involved. CoreWeave and Nebius are highly leveraged and unprofitable, and Oracle is moving in that direction to fund its massive land grab. The opposite is true of Micron, Nvidia, and their chip stock peers, who are seeing record revenue and profits in the AI era, and are calling for more growth ahead. To the extent that there is a bubble in AI, it seems confined to the infrastructure subsector. With its blockbuster guidance and soaring growth, Micron continues to look like a smart buy heading into 2026. In fact, the memory specialist looks cheap, trading at a forward P/E of just 13, and analyst estimates will go up following the earnings report, making it even cheaper on a forward basis. For investors wondering what to do about the volatility in the AI sector, investing in chip stocks like Micron and Nvidia looks like a smart move. Regarding the AI infrastructure stocks, it seems better to avoid them until there's greater visibility that the new business model will lead to profit.

Micron Valuation Hinges on Whether the $18.7B Guide Converts Cleanly Into Results | Investing.com UK

NASDAQ:MU trades at $270.39 (+1.68%) with $268.29-$277.29 intraday range and $277.29 as the 52-week high inside a $61.54-$277.29 yearly band. The stock is sitting on a $302.54B market cap with P/E 25.71 and a 0.17% dividend yield. The market is not rewarding "recovery optics" anymore -- this price assumes Micron converts guidance into reported numbers fast. Q1 FY26 already reset expectations: $13.64B revenue versus $12.88B expected and $4.78 EPS versus $3.96. The real reprice came from the forward line: Q2 FY26 revenue guidance $18.7B against a prior Street model around $14.3B-$14.4B, paired with $8.42 EPS guidance and 68% non-GAAP gross margin. At $270, the stock is not trading on "AI narrative"; it's trading on whether those three numbers land without margin slippage. Micron's edge is being framed as contract-backed scarcity. Management indicated HBM for 2026 is sold out, with volume and pricing covered, and it expects tight supply conditions to persist beyond calendar 2026. That shifts Micron's earnings quality: a meaningful slice of the mix is less exposed to spot-cycle whiplash and more anchored to multi-quarter commitments. Micron's HBM demand framing is not incremental. It points to HBM total addressable market expanding from $35B in 2025 to $100B in 2028, implying roughly 40% CAGR through 2028. If that growth curve holds, the stock's valuation becomes a function of allocation and supply discipline, not just "memory pricing." Micron is aligning its product cycle with the next compute step. It confirmed HBM4 ramp timing for H2 2026, overlapping with referenced next-gen accelerator ramps tied to Nvidia Vera Rubin and AMD MI400 / Helios MI400. Rubin is framed as about 3× compute improvement vs Blackwell Ultra, while AMD's MI400 is described as incorporating 432GB of HBM4, roughly 50% more memory capacity and bandwidth than Rubin's upcoming platform. That combination is why HBM is being treated like infrastructure, not commodity DRAM. Even with HBM dominating headlines, DRAM scale still drives the income statement. The data cites DRAM growth of 69% y/y and DRAM representing about ~79% of revenue. That explains why earnings are snapping higher: when core volumes grow and the mix upgrades, operating leverage becomes extreme. For the quarter shown (Nov 2025), Micron printed $13.64B revenue (+56.65% y/y), $5.24B net income (+180.21% y/y), EPS $4.78 (+167.04% y/y), and EBITDA $8.35B (+98.57% y/y). Net margin is listed at 38.41% and operating expense at $1.51B (+28.62% y/y). These are not "cyclical-normal" figures -- they reflect a constrained supply environment and mix shift. The company is converting earnings into operating cash, but capex intensity is still eating the final number. Cash flow shows $8.41B from operations (+159.28% y/y), -$4.59B investing cash flow, -$3.75B financing cash flow, and $691.75M free cash flow (+207.41% y/y), with $86M net change in cash. That gap -- strong operations, modest FCF -- fits an expansion cycle, not a harvest cycle. Micron shows $10.32B cash and short-term investments (+35.98% y/y), $85.97B total assets (+20.30% y/y), $27.17B liabilities (+10.14% y/y), and $58.81B equity. Returns listed include ROA 18.18% and return on capital 21.79%, with 1.13B shares outstanding and price-to-book 5.09. The balance sheet can fund the build, but the market will demand that spending converts into sustained pricing power, not oversupply. The data cites OpEx rising from about $1.3B with a $120M sequential increase in the quarter discussed and guidance around $1.38B for Q2 in that framing. On the reported table, operating expense is $1.51B (+28.62% y/y). When revenue and margins are this elevated, cost creep becomes the easiest way to disappoint without "missing revenue." On the tape, P/E 25.71 at $270.39 can look heavy for memory. But forward lenses referenced in the data cite ~11.6× next year's earnings and even ~8.3× in another framing, because the earnings curve is being pulled up aggressively. The real valuation question is not the multiple -- it's whether Micron holds anything close to 68% non-GAAP gross margin long enough for the "E" to arrive. The comparative snapshot cites operating margin ~32.5% and revenue growth 45.4%, alongside a ~206.6% price rise over the last year. It also flags that peers like STX and WDC saw even larger returns, and highlights that Micron's free cash flow margin is less competitive in that comparison. Translation: investors are chasing AI exposure across storage and memory, but the market still punishes any sign the cycle is turning. The risk is not "AI demand disappears." The risk is that higher memory pricing forces OEM behavior changes in PCs and smartphones. The data explicitly raises that customers may do mix adjustments due to higher memory prices and cites a scenario of global smartphone shipments down 2.1% in 2026 tied to higher chip costs. If consumer units soften while Micron is scaling supply, the stock's margin premium can compress quickly. With the stock printing $277.29 as the year high and trading in the $265-$270 area, the immediate technical reality is simple. Above $277.29, the market is effectively validating the Q2 guide and pricing a higher earnings plateau. Below the low $260s, credibility starts getting questioned because the market is no longer forgiving "almost hit guidance" after a guide as aggressive as $18.7B. BUY at $270.39, because the dataset supports a structural earnings lift: HBM sold out for 2026, tightness projected beyond 2026, Q1 already printed $13.64B revenue and $4.78 EPS, and management guided $18.7B revenue, $8.42 EPS, and 68% non-GAAP gross margin. The risk is straightforward: at this price, missing the $18.7B / 68% / $8.42 framework can trigger a sharp reprice because expectations have been dragged forward.

Micron: Why Is It Set Up to Be 2026's Breakout AI Stock | Investing.com UK

Micron Technology (MU) has officially signaled the start of a massive fiscal year, delivering what analysts are calling "monster numbers" for its first quarter of fiscal 2026. With shares jumping over 13% in extended trading following the report, the memory giant has proven that the artificial intelligence infrastructure boom is far from over. As we head into 2026, Micron is positioning itself not just as a participant but as a critical linchpin in the AI hardware ecosystem, supported by record-breaking guidance and insatiable demand for its high-bandwidth memory (HBM) chips. Micron's fiscal first-quarter results shattered Wall Street's expectations, delivering adjusted earnings per share (EPS) of $4.78 against an estimate of $3.95. Revenue surged 57% year-over-year to hit $13.64 billion, comfortably beating the $12.84 billion consensus. This financial performance was supported by net income of $5.24 billion, a stark turnaround from the $1.87 billion recorded in the previous year, proving the company's profitability is scaling alongside its revenue growth. Beyond the headline figures, the quality of Micron's earnings is evident in its cash generation. The company reported operating cash flow of $8.41 billion for the quarter, a massive increase from $3.24 billion in the same period last year. This liquidity is vital as Micron ramps up capital expenditures to meet production goals. The market reacted swiftly to this fundamental strength, with the stock price climbing to approximately $255.60 in after-hours trading. The forward-looking guidance is even more aggressive, setting the stage for a breakout in 2026. For the current second quarter, Micron forecasts revenue between $18.3 billion and $19.1 billion, with a midpoint of roughly $18.70 billion, blowing past analyst expectations of $14.20 billion. The company also projects adjusted EPS to nearly double sequentially to a range of $8.22 to $8.62, far exceeding the consensus estimate of $4.78. This outlook confirms that the "AI supercycle" is accelerating, with CEO Sanjay Mehrotra noting that server unit demand has strengthened significantly and is expected to grow in the "high teens" throughout the fiscal year. The driving force behind Micron's explosive growth is the pivotal role of High Bandwidth Memory (HBM) in the AI landscape. Micron is one of only three companies globally capable of manufacturing the high-bandwidth memory chips required by Nvidia and AMD for their cutting-edge AI processors. Morgan Stanley has noted that Micron's historic revenue and profit upside is now "second only to Nvidia," validating its status as a top-tier AI player. Demand is so intense that Micron has already sold out its entire HBM supply for 2026, including its upcoming HBM4 generation, cementing its revenue visibility for the next 12 to 18 months. This sell-out status insulates Micron from short-term market fluctuations and guarantees volume for its highest-margin products. Data center revenue is leading the charge, with cloud memory sales doubling annually to reach $5.28 billion. It is important to distinguish where this growth is coming from: while traditional core data center sales grew a modest 4% year-over-year, the explosive demand is almost entirely driven by AI-centric cloud deployments. The insatiable need for faster memory to train large language models (LLMs) has created a supply-demand imbalance that heavily favors Micron. The company's technology is deeply integrated into the AI ecosystem; for instance, its HBM3E memory is a key component in AMD's latest AI chips. By 2026, as AI models grow larger and more complex, the "memory wall" will become the primary bottleneck, making Micron's high-performance chips as valuable as the processors themselves. While the outlook is bullish, Micron faces distinct challenges in 2026, primarily revolving around supply constraints and market bifurcation. The company has admitted it can currently meet only 50-60% of demand for some key customers, a "tightness" that is both a pricing opportunity and a volume risk. To preserve supply for high-margin data center and AI clients, Micron has made the strategic decision to stop selling certain memory products directly to consumers. This pivot highlights the immense pressure on its manufacturing capacity and indicates that the company is prioritizing industrial-scale AI clients over retail channels. Additionally, rising memory costs are beginning to impact the consumer smartphone and PC markets. Manufacturers may be forced to raise prices or downgrade specs, potentially softening demand in non-AI sectors as memory chip prices pressure shipments. However, the opportunities for 2026 likely outweigh these risks. Retail and institutional sentiment is shifting to view Micron as a "true value stock" compared to other AI high-flyers, given its lower price-to-earnings ratio relative to its growth. Investors are increasingly seeing Micron as a safer bet with better risk/reward ratios than peers like Nvidia, as its fundamentals begin to "win over the hype." Unlike peers such as Oracle, which faced stock volatility due to high capital expenditures and "AI doom" narratives without immediate margin payoff, Micron is delivering immediate top and bottom-line beats that justify its valuation. Furthermore, with the HBM market total addressable market (TAM) forecast to hit $100 billion by 2028, two years earlier than predicted, Micron's aggressive investment in new fabs and technology nodes places it in a prime position to capture market share from rivals like Samsung. ***

Micron Logs Sales Jump, Sees Further Growth as AI Demand Outpaces Supply -- Update

Micron Technology expects growth to soar higher in the coming months as AI developers scramble for a tight supply of memory-storage products. The Boise, Idaho, memory provider on Wednesday raised its outlook for demand growth for two of its key products and shared revenue guidance well above Wall Street estimates. Chief Executive Sanjay Mehrotra said that supply isn't keeping up with high levels of demand, and that dynamic shows no signs of slowing. "We believe that the aggregate industry supply will remain substantially short of the demand for the foreseeable future," Mehrotra told analysts on a call. In the current second quarter, Micron expects revenue to be $18.7 billion and adjusted earnings per share of $8.42, both at the midpoint. Analysts were projecting sales of $14.33 billion with adjusted earnings of $4.78 a share. Shares rose 5.7% to $238.53 in after-hours trading. Through the close, the stock had nearly tripled in value this year. Growth in AI data center capacity is driving a significant increase in demand for high-performance and high-capacity memory and storage, Mehrotra said. Management now expects server unit growth to be in a high-teens percentage range, up from the 10% growth it forecast in its September earnings call. "Over the last few months, our customers' AI data center build-out plans have driven a sharp increase in demand forecasts for memory and storage," Mehrotra said. Demand for two of its main memory products, DRAM and NAND, has also gone up since September. Micron now expects DRAM demand to increase in the low 20% range, up from the high teens, and NAND demand to increase in the high teens, up from the low- to mid-teens, Mehrotra said. Micron expects to increase DRAM and NAND bit shipments by about 20% in calendar 2026, he said. Memory is now essential to AI's cognitive functions, which is making it a crucial asset that dictates how well a product performs, Mehrotra said. System capabilities heavily rely on advanced memory for processing, which is necessary for products such as self-driving cars and advanced medical diagnostics. "Micron is in the best competitive position in its history and is one of the semiconductor industry's biggest enablers of AI," Mehrotra said. Profit in Micron's fiscal first quarter, which ended in late November, was $5.24 billion, or $4.60 a share, up from $1.87 billion, or $1.67 a share, a year earlier. Stripping out certain one-time items, adjusted per-share earnings were $4.78, ahead of the $3.96 anticipated by analysts, according to FactSet. Revenue rose 57% to $13.64 billion. Analysts surveyed by FactSet forecast revenue of $12.91 billion. Sales from Micron's cloud memory business made up $5.28 billion of that total. Write to Katherine Hamilton at [email protected] Corrections & Amplifications This article was corrected at 6:22 p.m. ET, to reflect that Micron Technology expects growth to soar higher in the coming months. The original article incorrectly said Micron Technologies expects growth to soar.

Micron shares surge amid sharply higher revenue forecasts on AI-led memory demand By Investing.com

Investing.com -- Micron Technology forecasts a sharp jump in revenue and earnings for the current quarter as higher memory prices, demand tied to AI workloads drove record first-quarter results. Shares of Micron were up about 6% in extended trading. The memory chipmaker posted non-GAAP earnings of $4.78 per share for the quarter ended Nov. 27, comfortably beating the average analyst estimate of $3.94. Revenue rose to $13.64 billion from $8.71 billion a year earlier. Consensus were of $12.83 billion. Micron has benefited from a sharp rebound in conventional DRAM pricing and rising demand for higher-speed memory tied to generative AI workloads. For the second quarter of fiscal 2026, Micron forecast revenue of $18.7 billion, plus or minus $400 million. That compares favorably with a Wall Street consensus estimate of $14.23 billion for revenue. The company sees EPS of $8.42 at the midpoint, nearly double the consensus of $4.49. Checks across the memory supply chain point to double-digit quarterly price increases for DRAM, Micron's core profit driver, in the current and following quarters, as buyers grow increasingly concerned about supply availability through 2026. "In fiscal Q1, Micron delivered record revenue and significant margin expansion at the company level and also in each of our business units," Chief Executive Sanjay Mehrotra said in a statement. The company expects its performance to strengthen through fiscal 2026 as it invests to support growing demand for memory and storage used in AI systems, CEO added. Demand for high-bandwidth memory and advanced NAND used in AI systems has strengthened, lifting pricing power, margins and cash flow. Micron said operating cash flow climbed to $8.41 billion, up from $5.73 billion in the prior quarter and $3.24 billion a year earlier, while free cash flow hit a record level.