Micron Technology (MU) delivered standout third-quarter results and a bullish fourth-quarter forecast, bolstered by red-hot demand for AI-driven memory chips.
While the performance impressed analysts and prompted a flurry of price target hikes, investor reaction was mixed as caution crept in over sustainability and geopolitical headwinds.
Record Results on Surging AI Demand
Micron posted revenue of $9.3 billion for the third quarter, a 37% jump from a year earlier and well ahead of analyst expectations. Earnings also came in strong at $1.91 per share, beating consensus estimates by over 30 cents. The results mark a significant turnaround for the company, which had faced margin pressure and sluggish demand in its consumer segments just quarters ago.
The Boise-based chipmaker attributes the growth to AI infrastructure spending, which is reshaping data centers and enterprise hardware needs. This pivot helped Micron outperform peers in the memory space and cement its position as a central player in the evolving AI value chain.
HBM Chips Steal the Show
High-bandwidth memory (HBM) has become the crown jewel of Micron’s product portfolio. Sales of these specialized chips—essential for powering the advanced GPUs used in AI training—rose nearly 50% quarter-over-quarter. Management confirmed HBM supply is sold out through 2025, with strong demand already forming for 2026.
Micron’s 12-high HBM3E chips are now in production ramp-up, and the company is investing heavily to expand capacity. A $200 billion long-term investment plan, aimed at bolstering U.S. semiconductor manufacturing and R&D, underscores its commitment to dominating this high-margin segment.
HBM is also boosting Micron’s presence in high-performance computing and enterprise markets. Data center sales more than doubled year-over-year, setting a new quarterly record and compensating for weaker trends in traditional PCs and smartphones.
Investor Sentiment Remains Guarded Despite Upbeat Guidance
Despite the stellar results, Micron shares wobbled after the earnings call. The company’s fourth-quarter revenue forecast of $10.7 billion and earnings guidance of $2.50 per share beat Wall Street projections by a wide margin. Yet, shares retreated in after-hours trading, reflecting investor hesitation.
Analysts cited concerns over whether Micron can maintain this growth trajectory, particularly if tariff risks escalate or if the AI memory rush slows. Some suggested that recent order strength could partly reflect customers pulling forward purchases to get ahead of potential trade barriers.
Still, analysts remain broadly bullish. Firms including JPMorgan, Piper Sandler, and Susquehanna all raised their price targets—some by as much as 35%—with most citing Micron’s unique leverage to AI trends through its DRAM and HBM products.
Conclusion
Micron Technology is firing on all cylinders, thanks to its strategic bet on high-bandwidth memory and the global boom in AI infrastructure. While its consumer-facing segments continue to recover, it's the AI-driven demand that’s rewriting the narrative. Though investors remain cautious about external risks, the long-term outlook remains strong—especially as Micron continues expanding capacity to meet growing needs.
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