Micron (MU) Stock Soars 10% After Crushing Earnings Expectations by 75%

TLDR

• Micron forecast Q2 adjusted profit of $8.42 per share, nearly double Wall Street’s $4.78 estimate
• Shares jumped almost 10% in premarket trading following the announcement
• Company expects memory markets to remain tight past 2026, meeting only half to two-thirds of key customer demand
• Q2 revenue guidance of $18.70 billion crushes analyst expectations of $14.20 billion
• Micron increased 2026 capital expenditure plans to $20 billion from $18 billion

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Micron Technology delivered a forecast that left Wall Street analysts scrambling to revise their numbers. The memory chip maker projected second-quarter adjusted earnings of $8.42 per share. Analysts had been expecting $4.78.

The stock responded accordingly. Shares climbed nearly 10% in premarket trading Thursday. Year-to-date, the stock has gained 168%.

The blowout numbers stem from a simple supply-demand equation. Memory chip prices are soaring. Supplies remain tight while AI data centers gobble up everything available.

Micron Technology, Inc., MU

Micron is one of only three major suppliers of high-bandwidth memory chips. These specialized components are essential for training and deploying AI models. The other two players are South Korea’s SK Hynix and Samsung Electronics.

CEO Sanjay Mehrotra told investors the company expects memory markets to stay tight past 2026. That’s a long runway of constrained supply.

Customers Can’t Get What They Need

Chief Business Officer Sumit Sadana painted a stark picture of the current market. No customer is getting 100% of what they want from Micron. Many are receiving substantially less than what they need.

The company is prioritizing AI-related demand. This strategy helps non-AI product margins too. When you’re turning away customers, you can be selective about who gets served first.

Micron beat expectations for its fiscal first quarter as well. Sales hit $13.64 billion versus estimates of $12.85 billion. Adjusted profit came in at $4.78 per share, topping the $3.95 consensus.

Revenue surged 57% year-over-year. Net income reached $5.24 billion, or $4.60 per share. That compares to $1.87 billion in the same period last year.

Betting Big on AI Infrastructure

The company is putting its money where its mouth is. Micron raised its 2026 capital expenditure plans to $20 billion. The previous estimate was $18 billion.

That cash will go toward adjusting production facilities for AI data center demand. Earlier this month, Micron announced it would dissolve its consumer-facing “Crucial” brand. The company is exiting direct-to-consumer memory chip sales entirely.

Cloud memory sales doubled on an annual basis to $5.28 billion. Core data center sales reached $2.38 billion, up 4% year-over-year. Both segments benefited from higher pricing.

Server unit demand has strengthened significantly. Mehrotra said server units grew in the high teens during 2025. This growth drives demand for high-performance, high-capacity memory and storage.

The company is negotiating multiyear contracts with key customers. These agreements provide visibility and help manage capacity allocation.

For the current quarter, Micron expects revenue of $18.70 billion, plus or minus $400 million. Wall Street had been modeling $14.20 billion.

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