Micron stock soars on earnings beat amid 'unprecedented' AI-fueled demand for memory chips

Micron (MU) banal soared much than 10% Thursday aft its quarterly results showed the representation chipmaker thriving acknowledgment to the tech industry’s unreserved to physique information centers that tin powerfulness artificial intelligence.

Micron’s precocious bandwidth representation (HBM) chips — a benignant of DRAM, oregon dynamic random entree representation — are a important portion of AI server systems, storing information temporarily and rapidly feeding it to GPUs (graphics processing units) arsenic they bid and tally AI models. The institution is simply a large supplier of representation to AI spot elephantine Nvidia (NVDA).

Micron’s DRAM gross roseate 69% to $10.8 cardinal successful the company’s archetypal quarter, driven by AI-linked request for HBM.

That upswing helped Micron's archetypal 4th net and gross surpass Wall Street’s expectations, with its EPS of $4.78 supra the projected $3.95 and its $13.6 cardinal successful quarterly gross supra the astir $13 cardinal estimated by Wall Street analysts tracked by Bloomberg.

Revenue from Micron's NAND — oregon retention chips — utilized successful information centers surpassed $1 cardinal for the archetypal time.

Micron was much bullish than expected astir the future, forecasting gross betwixt $18.3 cardinal and $19.1 cardinal successful the 2nd quarter, supra the $14.4 cardinal expected. The chipmaker’s profits are besides acceptable to payment arsenic surging AI request has created an manufacture shortage of representation chips: The institution sees EPS hitting $8.42 astatine the midpoint successful the February quarter, up of the $4.71 estimated by analysts, and projects its gross borderline volition deed an all-time precocious of 68%.

“Over the past fewer months, our customers' AI information halfway buildout plans person driven a crisp summation successful request forecast for representation and storage,” CEO Sanjay Mehrotra said successful a telephone with analysts pursuing the results Wednesday. "We judge that the aggregate manufacture proviso volition stay substantially abbreviated of the request for the foreseeable future."

The CEO said helium expects the marketplace for HBM chips to soar to $100 cardinal successful 2028 from $35 cardinal successful 2025.

The affirmative astonishment had Wall Street analysts upping their terms targets connected Micron shares arsenic precocious arsenic $500 Thursday morning.

“Micron continues to payment from highly favorable manufacture conditions, driven by unprecedented AI-related demand, peculiarly for higher-value representation products, coupled with persistently choky planetary proviso conditions,” Raymond James expert Melissa Fairbanks said successful a enactment raising her terms people connected the banal to $310 from $190.

Micron’s shares stood astir $251 successful midday trading, with Thursday’s summation putting the banal up astir 210% for the year.