Micron stock climbs on blowout earnings and strong AI-fueled guidance
Micron is riding the AI memory wave to blowout results — but the boom for chipmakers may be just beginning
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After Wednesday’s bell, Micron Technology delivered record Q3 revenue and issued a bullish forecast for the current quarter, sending its shares higher in after-hours trading.
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Ahead of Thursday’s bell, shares are up 2% — and that’s on top of the 50%+ they’ve already gained year to date.
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What’s behind the price jump?
The Idaho-based chipmaker reported adjusted earnings of $1.91 per share on revenue of $9.3 billion, well above Wall Street estimates of $1.60 and $8.86 billion, respectively.
The year-over-year growth is eye-popping: earnings jumped 208%, and revenue surged 37%, driven by booming demand for the special memory chips powering artificial intelligence applications large and small. Revenue from high-bandwidth memory, known as HBM and crucial for AI workloads, grew nearly 50% from last quarter’s figures. Data center revenue more than doubled.
CEO Sanjay Mehrotra touted the company’s leadership in HBM and DRAM (“dynamic random access memory,” or volatile memory that powers off when the overall unit is powered off), as well as record performance in its consumer-oriented segments. Micron has also begun shipping HBM4, its next-generation high-performance memory for AI data centers.
The boom stage of the cycle
Micron’s forecast came in well ahead of analyst expectations, too.
For Q4, the company expects revenue of nearly $11 billion and adjusted EPS of $2.50. If they get there, such growth would represent a 40% gain over last year’s sales and a 31% rise from this quarter’s. It’s heady stuff, but given the ongoing AI and related data-center boom, Micron’s making it look well within reason. So it's no wonder the stock is emerging as a Wall Street darling, especially amid the much more uncertain macro picture that has B2B and consumer demand looking volatile in almost every area but AI.
Semiconductor stocks like Micron may be famously subject to steep boom-and-bust cycles, but there’s no question which part of the cycle we’re in now: Boom goes the dynamite.