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In this video, I will cover Micron's (MU 2.66%) latest earnings report and explain what the results mean for the stock and how I am managing my own position. Watch the short video to learn more, consider subscribing, and click the special offer link below.
*Stock prices used were from the trading day of June. 25, 2026. The video was published on June. 25, 2026.
Neil Rozenbaum has positions in Micron Technology. The Motley Fool has positions in and recommends Micron Technology. The Motley Fool has a disclosure policy. Neil is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
Micron Technology's MU shares fell sharply on Friday, giving up part of the gains recorded earlier in the week despite the memory chipmaker reporting stronger-than-expected quarterly results.
The stock declined nearly 5% in premarket trading as weakness spread across the broader semiconductor sector.
Other US chipmakers also traded lower, with Intel down just over 3%, Sandisk falling 5%, Arm shedding 4%, and Marvell declining 3.7%.
The decline came as investors remained cautious about the rising costs associated with artificial intelligence infrastructure, triggering a broader sell-off across global semiconductor stocks.
The weakness extended beyond the United States.
In Europe, ASML fell 2.2%, Infineon declined 3.7%, ASM International lost 2.8%, ST Microelectronics dropped 3.3%, and Be Semiconductor slipped 2%.
In Asia, Japanese conglomerate SoftBank led regional losses, plunging more than 12%.
The broader pullback followed a strong rally in AI-related semiconductor companies, even as Micron delivered robust financial results and issued an optimistic outlook.
MU reported third-quarter revenue of $41.46 billion, compared with $9.3 billion in the same period a year earlier.
The result exceeded analysts' expectations.
Adjusted earnings reached $25.11 per share on revenue of $41.5 billion, representing a 346% year-on-year increase.
Adjusted gross margin stood at 85%, while adjusted operating margin reached 81%.
The company also projected revenue of around $50 billion for the current quarter, compared with $11.3 billion in the corresponding period last year.
Micron also said customers had committed $22 billion to secure future memory chip supply.
Following the earnings announcement on Wednesday, Micron's shares surged more than 15% in a single session.
The stock has gained approximately 863% over the past year.
The rally briefly pushed Micron ahead of Meta Platforms and close to Tesla in terms of market capitalisation on Thursday.
Micron's market value had peaked at $1.398 trillion on Thursday's session compared with Meta Platforms at $1.392 trillion.
Tesla stood at around $1.4 trillion.
Micron currently has a market capitalisation of $1.37 trillion.
The company first crossed the $1 trillion market valuation mark on May 26, joining a group of semiconductor companies benefiting from investor enthusiasm surrounding artificial intelligence infrastructure.
Micron said second-quarter revenue quadrupled as demand for memory chips continued to outpace supply.
The company described the market as being supported by a demand-driven chip shortage that it expects to continue beyond 2027, marking a change from earlier expectations that supply constraints would ease sooner.
Micron now has 16 long-term chip supply agreements in place.
Growth was primarily driven by the company's two data-centre business segments, which together generated $25 billion in revenue, up 415% from a year earlier.
• Micron Technology stock is feeling bearish pressure. What’s pressuring MU stock?
Rather than hurting Micron, analysts say the listing could draw greater attention to the entire memory sector at a time when AI demand continues to drive what many see as a multiyear industry upcycle.
SK Hynix’s ADR Could Broaden The AI Memory TradeDi Zhou, portfolio manager at Thornburg Investment Management, said the industry remains firmly in the grip of a memory supercycle.
“We are in the midst of a memory super cycle, with all three major suppliers — Samsung, SK Hynix and Micron — riding the AI-driven demand wave,” Zhou said.
He noted that U.S. investors have historically had limited access to Korean equities because of the lack of ADRs and the complexity of opening local brokerage accounts.
“SK Hynix’s ADR listing expands the investable universe for U.S. investors to access two of the three largest memory suppliers globally,” Zhou said, adding that broader ownership could “potentially narrow its valuation gap with Micron.”
Why Micron Investors Should CareGreater accessibility for SK Hynix may seem like new competition for Micron, but some analysts see the opposite effect.
Paul Meeks, head of technology research at Freedom Capital Markets, believes the listing could lift sentiment across the entire AI memory space.
“SK Hynix is riding the memory wave to this ADR listing. Times have never been better for this industry, which I’ve covered since the 1980s,” Meeks said.
“I think that the PR/IR around this listing will be a boon to all the companies in this group here and abroad, including our own MU,” he added.
The comments suggest that rather than shifting investor interest away from Micron, SK Hynix’s Wall Street debut could increase awareness of the broader AI memory trade, bringing fresh capital and analyst attention to a sector benefiting from soaring demand for AI servers.
For Micron investors, that could mean the arrival of a new competitor on U.S. exchanges also becomes a catalyst that shines a brighter spotlight on one of the semiconductor industry’s fastest-growing segments.
Image via Shutterstock
Market News and Data brought to you by Benzinga APIs
HSBC has sharply raised its Micron (NASDAQ: MU) stock price target from $1,100 to $1,700, marking yet another upward revision for the semiconductor company.
For context, the bank’s first Micron target this year was $350, showing how quickly sentiment around memory has shifted as demand for artificial intelligence (AI) continues to accelerate.
Of course, Micron’s financial results have also helped build investor confidence, with fiscal third-quarter revenue of $41.46 billion and adjusted earnings per share (EPS) at $25.11.
At the center of this strength has been high-bandwidth memory and DRAM employed by data centers, which have effectively turned memory into one of the key constraints in the AI supply chain.
Micron price target raised to $2,000 at Barclays Barclays has also increased the firm’s price target on Micron from $1,175 to $2,000, and it keeps an ‘Buy’ rating on the shares following the earnings report.
The new price comes as Barclays cautions that equity markets may be heading into a volatile summer, as rising real yields and a strengthening U.S. dollar drive a rotation away from this year’s momentum leaders.
According to Barclays, real rates have broken out of their year-to-date trading range while the dollar has surged higher. The shift has weighed heavily on 2026’s strongest-performing trades, including AI.
Still, Barclays struck a more constructive tone on semiconductors, saying that strong results from Micron reinforce the view that AI-related demand remains strong.
Wall Street Micron consensus As of press time, Wall Street’s average price target for Micron stock is $1,526, implying nearly 26% upside from the current price, as per TipRanks estimates.
Micron stock price target. Source: TipRanks With 28 ‘Buy’ and just one ‘Hold’ rating in the past 90 days, Micron is on average rated a ‘Strong Buy.’
Featured image via Shutterstock
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Strong Results, But Profit-Taking Takes HoldMicron reported adjusted earnings per share of $25.11 on revenue of $41.46 billion, while adjusted gross margin reached 84.9%. The company also forecast fiscal fourth-quarter adjusted EPS of about $31 on revenue of roughly $50 billion.
Management said it has signed multi-year strategic customer agreements designed to make revenue and earnings more predictable. Analysts also pointed to sustained pricing strength for AI-focused DRAM and NAND memory as another positive sign for the business.
Even so, the broader risk-off mood weighed on high-growth semiconductor stocks, prompting investors to lock in gains after Micron’s sharp rally.
Bank Of America Sees Structural Memory ShiftBank of America Securities analyst Vivek Arya told CNBC on Thursday that the memory industry is seeing a structural shift rather than a typical cyclical upswing, driven by AI demand and tighter supply discipline.
The analyst said AI depends heavily on memory, while high-bandwidth memory is three to four times harder to produce than conventional chips.
He said Micron’s results showed stronger cycle durability, supported by agreements with 16 customers that provide multi-year visibility into supply, pricing, and units.
Arya said memory now accounts for about 35% to 40% of cloud capital spending, and the supply-demand imbalance could last at least through the end of next year.
The analyst said AI infrastructure deployment should continue through the end of the decade, though growth may not remain at 60% to 70% annually.
Technical Picture Remains BullishDespite Friday’s pullback, Micron remains in a strong long-term uptrend.
The stock trades 12.8% above its 20-day simple moving average, 46.6% above its 50-day SMA and 174.7% above its 200-day SMA. Those large gaps suggest the shares remain extended after a powerful rally and could see additional short-term volatility if buyers fail to defend key support levels.
Momentum indicators also remain constructive. The MACD stays above its signal line, indicating bullish momentum remains intact even as the stock retraces from recent highs.
Micron recently reached a 52-week high of $1,255 in June after rebounding sharply from its April low. So far, the latest decline appears to be a normal pullback rather than a reversal of the broader uptrend.
Key resistance is $1,255, while the nearest support is the 20-day SMA at $1,024.97.
Analysts Remain BullishThe stock carries a Buy consensus rating from 50 analysts, with an average price forecast of $1,477.17. Recent analyst actions include:
Barclays: Overweight; raised price forecast to $2,000 on June 25. Citigroup: Buy; raised price forecast to $1,400 on June 25. Goldman Sachs: Neutral; raised price forecast to $1,100 on June 25. Micron trades at roughly 27.4 times forward earnings, reflecting expectations for continued AI-driven growth.
Benzinga Edge SnapshotMicron continues to score highly on Benzinga Edge metrics.
Its Momentum score stands at 99.73, while Quality is 98.30 and Growth is 85.18. The Value score is 15.94, indicating investors are paying a premium for the company’s growth prospects.
The combination suggests Micron remains a strong momentum stock. However, elevated expectations could make the shares more sensitive to market pullbacks.
ETF ExposureMicron is a major holding in several semiconductor-focused exchange-traded funds:
Large inflows or outflows in these funds can create additional buying or selling pressure on Micron shares.
Price ActionMU Stock Price Activity: Micron Technology shares were down 5.24% at $1150.00 during premarket trading on Friday, according to Benzinga Pro data.
Image via Shutterstock
Market News and Data brought to you by Benzinga APIs
Micron Technology's shares tumbled on Friday, paring gains from earlier in the week after reporting blowout earnings.
The memory chipmaker declined nearly 5% in premarket trading as other U.S. semiconductor firms also struggled. Intel was last down just over 3%, Sandisk fell 5%, Arm shed 4%, and Marvell declined 3.7%.
Investors remain wary of the rising costs of artificial intelligence infrastructure, with the sell-off reverberating across global markets.
In Europe, key chip stocks also saw losses. ASML was down 2.2%, Infineon fell 3.7%, ASM International dropped 2.8%, ST Microelectronics lost 3.3%, and Be Semiconductor fell 2%. Japanese conglomerate Softbank led losses in Asia and plunged more than 12%.
Micron's third-quarter revenue more than quadrupled to $41.46 billion, up from $9.3 billion a year prior, it reported on Wednesday, beating analysts' expectations. It's projecting revenue of around $50 billion for the current quarter, compared with $11.3 billion a year earlier. The company's stock soared more than 15% on the day and is up 863% over the past year.
Micron's stock over the past year.
As major hyperscalers build out AI infrastructure, including data centers, they're requiring huge amounts of memory chips that they're purchasing from Micron.
That surge in demand is reducing the supply of memory for other devices like smartphones, PCs, and more, which has pushed prices higher and lifted Micron's earnings.
Shares of Micron Technology (MU +14.50%) surged on Thursday after the memory chip leader delivered a blockbuster earnings report.
Image source: The Motley Fool.
An AI bonanza Micron's revenue rose a staggering 346% year over year to $41.5 billion in its fiscal third quarter, which ended on May 28.
The AI boom and the massive data sets it requires are creating enormous demand for the high-performance memory chips Micron produces.
With demand outpacing supply, the chipmaker is enjoying a highly favorable pricing environment that's driving its profit margins sharply higher.
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Micron's gross margin climbed to 84.6%, up from 37.7% in the prior-year quarter.
The semiconductor leader's net income, in turn, increased 15-fold to $28.2 billion, or $24.67 per share.
"Micron's record fiscal Q3 financial results and even stronger outlook for Q4 reflect the strategic value of memory in the AI era," CEO Sanjay Mehrotra said.
The good times are set to continue Micron guided for $50 billion in revenue and $31 in adjusted earnings per share in the fourth quarter.
Yet it was management's comments regarding tight supply conditions persisting beyond calendar 2027 due to booming AI-driven demand that really got investors excited.
"We currently do not have line of sight as to when memory supply will be able to catch up with increasing demand," Mehrotra said during a conference call with analysts.
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology. The Motley Fool has a disclosure policy.
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Stock Market Ends Mixed As Techs Struggle Again, But Micron Spreads Good Cheer Late The tech-heavy Nasdaq extended its losing streak to four sessions Thursday, even as memory-chip stocks soared on Micron Technology's (MU) blowout earnings report. Apple (AAPL) stock was a downward pressure point as it dived below a key support level. Meanwhile, Advanced Energy Industries (AEIS), Douglas Dynamics (PLOW) and Powell Industries (POWL) traded in or near buy zones. The Nasdaq dropped 0.5%,…
Memory chips rarely steal the spotlight from the processors they support. But Micron Technology (MU +14.50%) just posted a quarter big enough to do exactly that -- and the read-through may matter most for investors in Nvidia (NVDA 1.86%), whose artificial intelligence (AI) accelerators are built around the very memory Micron is scrambling to supply.
Micron's stock jumped about 16% as of this writing on the results. Nvidia's, oddly, slipped about 1.6% on the same day. But look past the one-day move, and Micron's report says something encouraging about how strong -- and how durable -- demand for AI chips looks heading into Nvidia's next chapter.
Imag source: Getty Images.
A record quarter built on AI memory Micron's fiscal third quarter of 2026 (the period ended May 28, 2026) was the biggest in the company's history. Revenue jumped 346% year over year to a record $41.46 billion, up from $9.30 billion a year ago, and climbed 74% from the prior quarter. Gross margin reached a record of about 85%, and non-GAAP (adjusted) earnings per share came in at $25.11.
The engine behind those numbers is high-bandwidth memory (HBM) -- the dense, fast memory stacked alongside the processors inside AI servers. Micron's data center revenue hit about $25 billion in the quarter, and its newest HBM4 product has already shipped more than $1 billion, ramping about twice as fast as the prior generation. Management guided for fiscal fourth-quarter revenue of $50 billion, which would be another 20% jump from the quarter it just reported.
What stands out most isn't the size of the quarter -- it's how locked in the demand looks. Micron's entire 2026 supply of HBM is already sold out under multi-year, fixed-price agreements, and the company said it can currently fill only about half to two-thirds of what several of its key customers want.
"Micron's record fiscal Q3 financial results and even stronger outlook for Q4 reflect the strategic value of memory in the AI era," said CEO Sanjay Mehrotra in the company's fiscal third-quarter earnings release.
What it means for Nvidia Micron's HBM gets stacked directly onto AI accelerators like Nvidia's Blackwell chips and the Vera Rubin platform set to ramp in the second half of this year. Micron is one of only a few companies in the world that can make it -- so when it says that memory is spoken for years in advance, it's effectively describing the order book for the chips the memory feeds.
Nvidia's own numbers point the same way.
In its fiscal first quarter of 2027 (the period ended April 26, 2026), revenue rose 85% year over year to $81.6 billion, with data center revenue setting a record at $75.2 billion. CEO Jensen Huang has said he sees at least $1 trillion in revenue from 2025 through 2027. Micron's HBM4 ramping twice as fast as its predecessor is a quiet vote of confidence in that next wave, since Vera Rubin leans on the newest memory.
So why did Nvidia stock slip while Micron's soared?
Part of it is that a sold-out, supply constrained memory market also means pricier memory -- a cost Nvidia may have to absorb or pass along. And AI sentiment has grown quick to punish any wrinkle. Of course, those are fair concerns. But they don't change the larger signal: the memory that goes into AI chips is sold out well into the future, which is hard to square with a demand boom that's about to fade.
This isn't to say that Nvidia is a sure thing. After all, it's not like shares are cheap. They trade at 30 times earnings. Additionally, we can't rule out the possibility of this AI boom's growth rate cooling faster than expected.
Still, for a company that just grew revenue 85%, you can't really call the stock expensive either. And Micron's incredible quarter is one more piece of evidence that the AI boom still looks like it's in the early innings.
Paul Meeks highlights the surge in memory prices as a key driver for Micron (MU) and the broader semiconductor sector. He examines whether the stock can extend gains after hitting a record high on strong earnings, with AI-driven memory demand accelerating.
The pre-market session on Thursday was a wall of green. Micron Technology (NASDAQ:MU | MU Price Prediction) ripped 12.32% intraday to $1,177.73 after a fiscal Q3 report that redefined what an AI-cycle blowout looks like. The rest of the memory complex came along for the ride. On CNBC the same morning, Global X’s Seana Smith framed the earnings report as vindication, saying “the beat and raise… very much justifies… the demand side of the story… with the AI infrastructure build out.” The interesting trade was buried in what came next.
Moreover, Academy Securities strategist Peter Tchir pivoted. “This solves some of the problems that came up earlier in the week,” he said, before adding that “there’s going to be better opportunities. The market’s got to start focusing on what the president’s next agenda is. Defense spending, space spending.” That is the trade hiding inside the chip rally.
The Micron number that anchors the debate Micron posted fiscal Q3 revenue of $41.46 billion against a $35.25 billion consensus. In addition, non-GAAP EPS came in at $25.11, and a GAAP gross margin at 84.6%. Cloud Memory alone did $13.77 billion. CEO Sanjay Mehrotra called it “the strategic value of memory in the AI era” in the 8-K press release. Furthermore, he then guided Q4 to $50 billion in revenue and 86% gross margin.
Steve Grasso raised the obvious complication. “You don’t really buy this stock at 80% margin… that’s why you see the stock fall 20% and then rise 15%. I would say we’re probably closer to the end in those.” The shares are up 267.54% year to date and 721.72% over a year. Qualcomm (NASDAQ:QCOM) rode the same wave higher, up 3.69% on the day, but its handset revenue fell 13% year over year in the prior quarter on memory supply constraints. The AI memory bull case is now priced.
The defense pivot Look at where the money would actually go. The Department of War’s FY 2027 budget request totals $756.8 billion in investment spending, an explicit 42% increase with $18 billion earmarked to operationalize Golden Dome and the largest space allocation in U.S. history. Patriot, THAAD, and SM-3/SM-6 inventories are being topped up.
Lockheed Martin (NYSE:LMT) has been the laggard, up only 2.85% year to date after a Q1 EPS miss at $6.44. Management reaffirmed $77.5 to $80.0 billion in FY26 sales and flagged multi-year framework agreements scaling Patriot, THAAD, and PrSM production three to four times current rates. The stock trades at a forward PE of 16x, against an analyst target of $625.16.
BWX Technologies (NYSE:BWXT) is the cleaner play on naval reactors and reshored nuclear manufacturing. Q1 revenue rose 26.1% to $860.22 million, backlog sits at $8.65 billion, and FY26 guidance was raised above $3.75 billion. Shares are up 19.31% year to date with a forward PE of 46x.
Space and rare earths Rocket Lab (NASDAQ:RKLB) was selected for the Space Based Interceptor under Golden Dome, posted Q1 revenue of $200.35 million up 63.5%, and carries a $2.2 billion backlog. The shares pulled back 20.90% over the past week as investors took profits from a 155.26% one-year run. MP Materials is the rare-earth complement, with NdPr oxide and metal sales up 192% and a long-term magnet supply deal with Apple. Both names slot directly into the reshoring line item Tchir keeps circling.
The rates wildcard Grasso argued rate cuts are coming. “I think the rate hike story is over. It’s done… It’s at 1.85% right now. So I think he’s going to be smart and create an argument by the end of the summer to be able to cut rates again,” he said. Kalshi’s January 2027 contracts price a 61% probability of fed funds staying above 3.25%, so the panel sits well ahead of the prediction-market crowd on dovishness. If correct, defense capex and space programs get cheaper to finance just as the budget cycle delivers demand.
If wrong, the Micron rally still has to defend an 86% gross margin guide. Either way, the more interesting position has moved off the memory chart.
Key Takeaways Micron reported fiscal Q3 2026 revenues of $41.46B, up 74% sequentially.MU expects fiscal Q4 2026 revenues of about $50B as AI memory demand accelerates.Micron's fiscal Q3 gross margin reached 84.6%, with operating cash flow of $25.39B. With the advent of artificial intelligence (AI), NVIDIA Corporation’s (NVDA - Free Report) shares have soared 902.3% over the past five-year period, pushing the company’s market capitalization above $4 trillion, and making it one of the most valuable companies in the world. Incessant demand for NVIDIA’s cutting-edge AI hardware, including its Blackwell chips and graphics processing units (GPUs), has been a key catalyst behind the company’s noteworthy performance.
However, in recent times, NVIDIA’s shares have seen modest gains, as most of its solid quarterly performance has been priced into the stock. At the same time, investors remain skeptical about whether AI-related spending will increase fast enough to justify the company’s lofty valuation. Needless to say, the ongoing China-related export restrictions could weigh on profit margins and derail NVIDIA’s long-term growth prospects.
But investors shouldn’t be disheartened if they have missed out on NVIDIA’s explosive gains; instead, Micron Technology, Inc. (MU - Free Report) could be the next big opportunity for them. Micron stock appears well-poised to notch a new record high, eclipsing its previous peak of $1,213.56 set on June 22, 2026. Micron has delivered exceptional returns of more than 700% over the past year.
Micron’s recent strong earnings results, driven by unprecedented demand for its state-of-the-art high-bandwidth memory (“HBM”) chips used in AI servers, coupled with its strategic supply partnership with Anthropic, have positioned the Micron stock for a potential breakout above its previous high. Let us thus take a closer look at the two major factors underpinning Micron’s bullish outlook.
Micron’s AI Transformation: Record Results, Margin Surge, Growth EraMicron’s latest blockbuster earnings results have reconfirmed that the company is no longer a cyclical memory stock; it has established itself as a vital supplier of AI infrastructure. For the fiscal third quarter of 2026, Micron reported revenues of $41.46 billion, way more than the $23.86 billion reported in the fiscal second quarter of 2026, and up 74% sequentially, according to investors.micron.com. Revenues also more than quadrupled from the same period a year earlier.
Even more encouraging is the company’s forward guidance, with Micron expecting revenues for the fiscal fourth quarter of 2026 to reach around $50 billion, indicating that demand for HBM chips used in AI servers is increasing at a faster pace than earlier market expectations. But it’s not just AI enthusiasm that is driving the company’s performance; Micron’s earnings and cash flows are increasing at a promising pace enough to justify its elevated valuation.
Micron’s profitability has reached exceptional levels, with its gross margin for the fiscal third quarter increasing to 84.6% from 37.7% a year ago, reflecting strong pricing power and the strategic importance of AI-focused memory products. Additionally, a robust operating cash flow of $25.39 billion during the quarter has strengthened the company’s balance sheet and has given enough financial flexibility to fund growth initiatives.
Meanwhile, a recent strategic collaboration with Anthropic will enable Micron to integrate its advanced memory solutions into future AI infrastructure and improve long-term demand-supply visibility. This partnership could act as a growth catalyst as the demand for Micron’s HBM chips and advanced memory solutions will increase.
Micron: The Next AI Winner After NVIDIAAs investors seek the next big AI beneficiary after NVIDIA, Micron has emerged as a strong contender. The company’s transformation as a key AI infrastructure supplier, supported by surging AI-driven HBM demand, explosive revenue growth, expanding margins, strong cash generation, and its Anthropic partnership, provides multiple catalysts for a significant upside.
With AI adoption still accelerating, Micron is all set to play a leading role in the next phase of the AI boom and deliver additional upside for investors. Micron currently has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares in the automated test systems equipment company Teradyne (TER +10.48%) rose by 10.5% today on a strong day of recovery for AI and semiconductor-related stocks. The move was sparked by an excellent set of earnings from memory chip company Micron Technology, a Teradyne customer, which helped dispel fears that the AI spending boom was about to slow.
Teradyne's exposure to the semiconductor spending cycle Micron's earnings blew past expectations, with revenue of $41.5 billion in its fiscal third quarter, compared with the pre-earnings consensus of $36.5 billion, according to Visible Alpha.
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It's another data point that supports the idea that AI spending, and in this case on high-bandwidth memory producers, is building momentum rather than slowing down. That's good news for Micron, and it's great news for Teradyne, because if its customers' revenue growth accelerates, they're highly likely to ramp up production, which means more demand for Teradyne's automated test equipment.
Its solutions help ensure quality control and improve production yields for chip manufacturers.
Image source: Getty Images.
Where next for Teradyne The improving memory and data center end markets weren't lost on Wall Street, and a BofA analyst raised his price target on the stock this week to $525 from $365, while maintaining a buy rating.
If the strength in Micron's revenue and guidance is repeated elsewhere, Teradyne's estimates will almost certainly have to be raised as well. Something to look out for in the coming weeks and months.
Bank of America is an advertising partner of Motley Fool Money. Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology and Teradyne. The Motley Fool has a disclosure policy.
MU weekly chart shows recent strong performance and potential measured move target zone Trend Structure and Moving Average Support MU broke out of a 15-month basing pattern in September and has continued to trend higher since then. The subsequent uptrend is defined by a rising trend channel. An upside breakout above that rising channel was successfully tested as support during a pullback. Support was also confirmed near the 20-day moving average and the prior trend high. Most recently, another successful test of support near the 20-day average on Wednesday ended the minor pullback and launched the stock into new trend highs. This is bullish behavior that further establishes the 20-day moving average as a key dynamic support level and suggests that higher targets may be tested.
Channel Extensions and Price Projections The larger rising channel contains a shorter channel encompassing more recent price action. That smaller channel points to the potential for continued movement toward its upper boundary. Moreover, the three most recent sequential trend highs in MU, including Thursday, were established near the resistance defined by a 150% projection of the original long-term rising channel. This further confirms the market’s recognition of that pattern; therefore, it may once again serve as a guide for price action.
Key Support and Upside Continuation Path Key support is near the 20-day moving average, currently near $1,025, and Wednesday’s higher swing low of $991.10. That low helps define the lower boundary of the smaller rising channel. If MU remains above those support levels, the earnings-driven breakout has the potential to develop into another sustained advance. Given the smaller channel’s position relative to the original larger channel, MU could continue to advance inside the smaller channel boundaries while progressing toward the 200% projection of the original channel.
Broader Bullish Structure Remains Intact Overall, the post-earnings breakout confirmation above prior trend highs reinforces the broader bullish structure, where strong demand and sustained momentum continue to define MU’s leadership within the semiconductor sector.
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Micron earnings shatter records… PCE inflation hits 4.1%… but what about the inflation number Warsh is watching?… are we only in the 3rd inning of AI? As I write on Thursday, Micron (MU) is up 14% after the memory chip giant reported blowout earnings yesterday after the closing bell.
The numbers were staggering…
Revenue hit $41.5 billion last quarter, up from $9.3 billion a year ago. Earnings came in at $25.11 per share adjusted, crushing the $20.28 Wall Street was expecting. Gross margins jumped to 84.9% – more than double where they were 12 months ago.
Then came the guidance…
Micron told investors to expect roughly $50 billion in revenue next quarter. Analysts had penciled in $43.6 billion. That’s not a beat. That’s a different zip code.
The story behind the numbers is straightforward: AI is eating memory chips faster than anyone can make them. CEO Sanjay Mehrotra was blunt on the analyst call – he can’t identify when the memory shortage will end:
Even as we expect industry supply to improve gradually in 2028, we currently do not have line of sight as to when memory supply will be able to catch up with increasing demand.
We expect tight conditions to persist beyond calendar 2027 as a result of AI-driven demand across all segments coupled with structural supply constraints.
To lock in this demand, Micron announced 16 long-term supply agreements with data center operators and other major customers, each covering three to five years. When complete, roughly half or more of Micron’s revenue will be committed under these deals.
That’s a fundamental shift for a business that has historically been hostage to boom-and-bust memory cycles.
Bottom line: The AI boom is alive and well, and despite some healthy profit taking today in tech, MU’s numbers bode well for the AI bull.
Meanwhile, the May PCE report dropped this morning It showed headline inflation came in at 4.1% year-over-year, up from April’s 3.8% and the highest reading since April 2023.
Meanwhile, Core PCE – which strips out food and energy – came in at 3.4% year over year, slightly hotter than April’s 3.3%.
Cue the financial media commentary about Fed Chair Warsh remaining hawkish and rate hikes – not cuts – as the most likely next move.
Perhaps. But that reaction misses something important – the real number that Warsh is watching, which also dropped today…
And when you understand it, you’ll have a cleaner read on Fed policy than most investors and talking heads.
Warsh doesn’t primarily look at the same inflation numbers everyone else is watching During his Senate confirmation hearing in April, he said that the Fed’s standard inflation gauge – the one that CNBC and others are splashing across their homepage this morning – is only a “rough swag” of actual price pressures.
“Swag,” he clarified, stands for “scientific wild guess.”
Instead, his preferred measure is something called the “trimmed mean PCE,” published monthly by the Federal Reserve Bank of Dallas.
The concept is worth a brief digression, because it will reframe how you read every inflation report going forward.
The standard PCE takes every item consumers buy – gasoline, groceries, streaming subscriptions, hospital visits – and averages all their price changes. That means a one-time spike in oil (say, from a Middle East conflict) gets baked directly into the headline reading, even if the rest of the economy is pricing normally.
Now, Core PCE does a better job of addressing this. It strips out food and energy prices.
But there’s a problem with Core too – it still absorbs every other price spike those energy costs trigger downstream.
While it overlooks spiking oil prices, it will count, for example, the skyrocketing airfares that airlines charge to recoup their soaring jet fuel costs. Because airfare is classified as a service, the energy shock sneaks into Core PCE through the back door – and gets mistaken for broad-based inflation.
Another example: Core PCE strips out “food purchased for consumption at home” (groceries). However, it explicitly includes “food services and accommodations” (dining out) as a service.
So, say you have an avian flu that pushes egg prices through the ceiling. That inflation could still show up when you dine out, even though it’s not expressed in Core PCE.
The solution – the inflation measure that Warsh prefers – is the “trimmed mean PCE,” which takes a different approach…
It lines up all those individual price changes from lowest to highest, lops off the most extreme readings on both ends of the spectrum – the temporary outliers, up or down – and then averages what’s left in the middle.
For Warsh, the result is a cleaner picture of the inflation that’s actually embedded in the economy, rather than the noise generated by geopolitical shocks.
To get a sense for the difference this can make, let’s rewind to last month.
April’s Core PCE ran at 3.3% year-over-year. However, the Dallas Fed’s trimmed mean for the same month was just 2.35%. That’s roughly one percentage point lower – sitting just above the Fed’s 2% target.
That’s a huge difference.
So, the issue coming into today that investors should have been watching wasn’t the headline or Core PCE numbers alone – it was the trimmed mean figure, and whether the spread between it and Core PCE would narrow, widen, or remain intact.
We got the answer…
What today’s trimmed mean numbers told us A few hours after the PCE data dropped, the Dallas Fed published the May trimmed mean figure. The yearly number came in at 2.42% – just a hair above April’s yearly 2.35% figure.
Recognize what this means…
With Core PCE clocking in at 3.4% this morning, the gap between it and the trimmed mean (2.42%) remained at roughly a full percentage point.
This supports Warsh’s belief that stripping out extreme price outliers reveals an underlying inflation trend that approaches the Fed’s 2% target – and remains somewhat stable.
On that last note, here’s the yearly trimmed mean figures over the last six months:
Dec: 2.4 Jan: 2.4 Feb: 2.3 Mar: 2.4 Apr: 2.3 May: 2.4 While the hawkish camp will point to this morning’s one-month annualized ticking up to 2.8% as evidence of fresh short-term heat, the broader 12-month baseline proves the structural trend remains firmly anchored.
Bottom line: This was a win on the inflation front. And going forward, keep your eyes on the trimmed mean – that’s the number Warsh is actually watching.
Are we in only the 3rd inning of this AI boom? Beyond writing the Digest, I also helm InvestorPlace’s Investing Insider newsletter where I feature interviews with our expert analysts, profile the research of major Wall Street investment shops, and highlight the most lucrative investment trends in the market.
In tomorrow’s issue, I sit down with legendary investor Louis Navellier, who makes a bold claim…
The AI boom may only be in its third inning.
He points to a chart from the research shop Bespoke that overlays the Nasdaq’s trajectory after the ChatGPT launch against the same window following Netscape’s release in 1994.
As you’ll see below, the blue line is the Nasdaq’s performance in the five years after the release of Netscape, overlaid against the red line – the years after ChatGPT’s launch in late 2022.
Though the data only runs through spring 2025, the Nasdaq hasn’t gone down since then. If anything, the red line has continued to climb – meaning the comparison is likely still tracking.
Now, bears might read this and think, “No, we’re already in the 9th inning, on the verge of an AI bubble pop that will be every bit as brutal as the dot-com pop.”
Perhaps. But make sure to factor in one key difference…
A chart from Alpine Macro shows that today’s AI boom has something the dot-com era didn’t have…
Real earnings growth, not just multiple expansion.
In the dot-com boom, P/E ratios went to the moon while profits barely budged. Today, earnings per share are compounding while multiples have stayed relatively flat. That’s a structurally different – and arguably more durable – setup.
See for yourself…
The pane on the left shows today’s AI boom with rising forward earnings and a largely flat forward P/E. The pane on the right shows the dot-com forward P/E soaring (then crashing) as forward earnings remained largely flat.
Source: Alpine Macro / Bloomberg Finance
One wrinkle here deserves a closer look, though There are legitimate questions about whether some of today’s AI-based earnings growth is as clean as it appears.
A growing chorus of analysts is flagging a capex recycling loop: hyperscalers like Google and Microsoft are booking profits while funneling massive capex into AI startups that, in turn, consume those companies’ cloud and AI services.
For example, A cloud giant makes a multi-billion-dollar “equity investment” into an AI pioneer like OpenAI. That pioneer uses its newly acquired cash or cloud credits to train and run models.
The hyperscaler then recognizes those exact credits as “fresh, organic commercial cloud revenue” on its public income statements, padding its bottom-line growth and boosting its stock price.
Financial filings show that just two unprofitable startups – OpenAI and Anthropic – anchor over half of the roughly $2 trillion in future cloud backlogs held by Microsoft, Amazon, Google, and Oracle.
It’s not a smoking gun, but it’s a real risk that we’ll be tracking closely in the Digest over the coming quarters/years.
To watch the full interview with Louis, you can join us in Investing Insider right here.
And keep your eye out for tomorrow, when Louis will release his latest research package. It highlights a methodology for tracking where institutional money is moving before the rest of the market catches on.
We’ll keep you updated on all these stories here in the Digest.
Extending industrial strength from the previous session, the Dow Jones Industrial Average (^DJI +0.14%) rose 0.14% to 51,920.62. The S&P 500 (^GSPC 0.01%) slipped 0.01% to 7,357.49, and the Nasdaq Composite (^IXIC 0.46%) fell 0.46% to 25,358.60 as fresh inflation data weighed on broader sentiment.
Gold prices rose 0.87% to $4,043.50 as of U.S. market close, and the 10-Year Treasury yield fell 0.01% to 4.39%. Industrials and healthcare led sectors, gaining 2.19% and 1.49% respectively, while communications slid 1.01%, and technology stocks fell 0.09%.
Today's biggest movesMicron Technology shares surged 16% today, and memory stocks gained, as artificial intelligence (AI) chip demand shows no sign of slowing. Caterpillar increased 6%, taking it to a record high of $1,047.33 following a landmark power deal this week. Conversely, Apple tumbled over 6% after hiking MacBook and iPad prices. Palantir Technologies fell more than 5% to a 52-week low as inflation data pressured growth-oriented software names.
What this means for investorsThe Personal Consumption Expenditures (PCE) index hit a three-year high of 4.1% in May, up from 3.8% in April. Although it was in line with expectations, it reinforces the strong likelihood that the Federal Reserve will increase rates later this year. Falling oil prices will ease some of the price pressure, but underlying inflation is still a concern and weighed on markets today.
Today’s trading highlights the two sides of the AI coin: Memory chip demand meant leader Micron soared after blowout earnings and bullish guidance. The costs associated with that same demand caused Apple to raise its prices, sending its stock tumbling. All of the Magnificent Seven fell today.
Emma Newbery has positions in Apple. The Motley Fool has positions in and recommends Apple, Caterpillar, Micron Technology, and Palantir Technologies. The Motley Fool has a disclosure policy.
Key Takeaways Micron's blockbuster quarter highlights relentless AI-driven demand for high-speed memory. Record margins and long-term contracts point to sustained pricing power in memory chips. ETFs with heavy Micron exposure may benefit as AI infrastructure spending accelerates. On June 24, 2026, Micron Technology (MU - Free Report) delivered another blockbuster quarter, reinforcing the strength of the AI memory cycle. The stock jumped 15% in after-hours trading following the announcement.
Record Quarter Crushes ExpectationsMicron reported fiscal third-quarter results that comfortably beat Wall Street estimates. Revenues of $41.46 billion topped the Zacks Consensus Estimate of $36.52 billion. Adjusted EPS of $25.11 outperformed the Zacks Consensus Estimate of $20.98.
Revenues surged more than fourfold from $9.3 billion a year ago. Net income soared to $28.24 billion compared with $1.89 billion in the year-ago period.
Looking ahead, Micron projected fourth-quarter revenue of approximately $50 billion, far above the Zacks Consensus Estimate of $42.64 billion.
AI Demand Keeps Memory Markets TightThe AI revolution continues to reshape the memory industry. Demand from data centers is consuming available production capacity, pushing up prices not only for high-performance AI memory but also for chips used in smartphones, laptops and automotive applications.
Supply shortages in memory and storage could take years to fully ease, even as industry capacity gradually improves through 2028, per management, as quoted on CNBC.
Perhaps the most significant development was Micron's announcement of 16 long-term customer agreements spanning three to five years.Thesecustomers include the likes of data center operators and automakers, per CNBC.
Sturdy Margins Gross margin climbed to a record 84.9%, up from 74.9% in the previous quarter and just 39% a year earlier. The company expects margins to expand further to roughly 86% in the current quarter, as quoted on Yahoo Finance.
The numbers suggest that the memory market remains exceptionally tight rather than showing signs of weakening.
Data Center Business Leads the ChargeAll four business segments delivered explosive growth, with data centers standing out as the primary driver.
Data center revenues jumped more than sevenfold to $11.5 billion from $1.53 billion a year earlier. Cloud memory revenues surged over 300% to $13.77 billion, while the mobile and client segment grew 250% to $11.52 billion. Automotive and embedded applications more than quadrupled, reaching $4.63 billion in sales.
AI Customers Are Securing Supply, Not Just Buying ChipsThe broader takeaway for investors is that AI customers increasingly view memory as a strategic bottleneck rather than a commodity input.
Advanced AI systems require enormous amounts of high-speed memory. Micron's technology serves as a key component in chips produced by NVIDIA and Alphabet, as well as the servers that contain those processors.
As a result, customers are locking in long-term access to supply instead of relying on spot markets. The shift could help reduce Micron's historical earnings volatility and create a steadier growth profile.
ETFs in Focus Against this backdrop, below we highlight a few ETFs that are heavy on Micron. While leveraged Micron ETFs include the likes of Direxion Daily MU Bull 2X ETF (MUU - Free Report) and GraniteShares 2x Long MU Daily ETF (MULL - Free Report) , these are risky bets.
AXS Knowledge Leaders ETF (KNO - Free Report) , iShares MSCI USA Value Factor ETF (VLUE - Free Report) , Strive U.S. Semiconductor ETF (SHOC - Free Report) , Global X AI Semiconductor & Quantum ETF (CHPX - Free Report) and First Trust Nasdaq Semiconductor ETF (FTXL - Free Report) has considerable weight in MU shares.
Memory stocks just went from cyclical chip plays to AI-era essentials, and Bank of America’s Vivek Arya thinks the market is still pricing them like the old version. Speaking on CNBC the morning after Micron Technology (NASDAQ:MU | MU Price Prediction) reported, BofA’s senior semiconductor analyst argued that “what we are witnessing is what I would call a structural rather than a cyclical shift in the memory industry. It is critical to AI. There is no AI without memory.”
The setup behind that call is the print itself. Micron delivered fiscal Q3 revenue of $41.46 billion, beating consensus by 17.60%, and non-GAAP EPS of $25.11 against a $20.28 estimate, the company’s seventh consecutive EPS beat. GAAP gross margin landed at 84.6%, up from 37.7% a year earlier, a transformation more typical of a software company than a DRAM maker. Q4 guidance calls for revenue of $50 billion and non-GAAP EPS of $31, both up sequentially, as detailed in the company’s 8-K press release.
What Arya thinks Wall Street is missing Arya’s structural case rests on three pillars. First, supply is genuinely hard to add. “You need 3 to 4 times the number of wafers to create the same amount of capacity with high bandwidth memory as you would do with a conventional product. So it’s just harder to create.” Second, memory is becoming a meaningful slice of hyperscaler budgets. Memory is almost 5 to 40% of cloud capital spending, and customers tolerate the price because the new compute stack pays for it. Third, the agreements. CEO Sanjay Mehrotra disclosed multi-year Strategic Customer Agreements covering 16 customers with price floors, a structural change from the spot-market whiplash that defined prior cycles.
Arya pegs the supply-demand imbalance lasting until at least the end of next year, with AI buildouts running at least until the end of this decade. Mehrotra’s own framing tracks closely. “Micron’s record fiscal Q3 financial results and even stronger outlook for Q4 reflect the strategic value of memory in the AI era.”
The valuation math nobody wants to do Now to the line that did the most work on CNBC. “Nvidia, Broadcom, Micron, they are all trading below the S&P 500 multiples. Micron is basically trading sub ten times right now.” The forward P/E on Micron sits at 9. Stack that against NVIDIA (NASDAQ:NVDA) at a forward 23 and Broadcom (NASDAQ:AVGO) at 34, and you can see why Arya thinks the memory name is the cheap entry into the same secular trade.
And the run has happened anyway. Micron is up 267.54% year to date through June 24, with the stock adding another 12.64% in Thursday’s session to $1,181. NVIDIA, by contrast, is up just 6.83% YTD; Broadcom 10.8%. Even after the surge, the multiple compressed because earnings outran the share price. Morgan Stanley moved its target to $1,200 from $1,050, and the analyst consensus 12-month target ratcheted up to $1,406.86 across 51 covering firms.
What HBM and the customer agreements actually buy you The Cloud Memory segment alone did $13.77 billion in Q3, up from $5.28 billion in Q1 of the same fiscal year. HBM4 is in volume shipments to a lead AI accelerator customer, with HBM4E slated for calendar 2027 volume production. Mehrotra’s pitch on the agreements is direct. “We believe our multi-year Strategic Customer Agreements will significantly enhance the durability and predictability of Micron’s strong financial performance.”
Durability is the word that matters. Memory bulls have been burned before by the boom-bust cadence, and the BofA argument is that price floors, HBM wafer intensity, and locked-in volume change the shape of the curve. If Arya is right, the stock is being valued for the old cycle while operating in a new one. If he is wrong, the 5 to 40% of cloud capex figure compresses, and the multi-year agreements get renegotiated. That is the trade.
The price increases affect products including the MacBook Neo, MacBook Air, MacBook Pro, iPad Pro, iPad Air, HomePod, HomePod mini and Apple TV, while iPhone pricing remains unchanged. Apple attributed the increases to tightening supplies of memory and storage components as AI infrastructure spending accelerates.
For Micron investors, however, the announcement may represent something more significant: real-world evidence that the AI memory crunch the company has been warning about is beginning to ripple beyond data centers and into consumer electronics.
Micron CEO Warned Memory Shortages Would PersistDuring its fiscal Q3 earnings call, Micron CEO Sanjay Mehrotra said the company still sees no clear end to tightening memory markets.
“We currently do not have line of sight as to when memory supply will be able to catch up with increasing demand,” Mehrotra told investors. “We expect tight conditions to persist beyond calendar 2027.”
The executive argued that artificial intelligence has fundamentally reshaped the memory industry, with AI systems requiring increasingly larger amounts of high-performance memory to support training and inference workloads.
“Memory has become a strategic asset,” Mehrotra said, adding that AI system performance is “architecturally dependent on memory subsystem performance and capacity.”
AI Data Centers Are Reshaping The Memory MarketThe connection between Apple’s pricing decision and Micron’s outlook highlights how AI infrastructure spending is increasingly influencing markets far beyond semiconductors.
Cloud providers and AI developers have been aggressively expanding data center capacity to support generative AI applications, fueling demand for advanced DRAM and NAND memory. That demand has helped tighten industry supply, allowing memory manufacturers to secure stronger pricing and long-term customer agreements.
Micron recently disclosed that customers have committed approximately $22 billion through strategic agreements, providing additional visibility into future demand as the company ramps production of high-bandwidth memory used in AI accelerators.
If Apple’s explanation proves to be an early indication of broader industry trends, the impact of AI-driven memory shortages may no longer be confined to hyperscale data centers. Instead, consumers purchasing everyday devices—from laptops and tablets to smart-home products—could increasingly feel the effects of a market Micron believes will remain supply-constrained for years.
For investors, Apple’s price increases may be the clearest sign yet that Micron’s AI memory thesis is beginning to play out beyond the walls of the world’s largest data centers.
Image via Shutterstock
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SummaryMicron Technology, Inc. has again delivered unprecedented growth, with FQ3 revenue up 346% to $41B and gross margins near 85%, driven by the AI memory demand surge.MU's strategic customer agreements (SCAs) now cover 20% of DRAM and one-third of NAND volumes, securing $22B in deposits and $100B in RPO through FY2027.Despite remarkable execution and cash flow, normalization risks loom post-FY2027 as supply ramps.Micron has truly silenced its skeptics, but that doesn't mean that cyclical risks are certainly gone with the wind. Growth could slow dramatically through FY2028.I believe it is not only timely but critical for new Micron investors to demonstrate restraint given MU's vertical price action, downside cyclical risks, and limited multiple expansion without further upside catalysts.Looking for a helping hand in the market? Members of Ultimate Growth Investing get exclusive ideas and guidance to navigate any climate. Learn More »Sitewide Sale 2026: Get 20% Off vzphotos/iStock Editorial via Getty Images
Micron is Entering the Stratosphere Right Now Micron Technology, Inc. (MU) is really taking everyone on a massive ride right now, one that is truly unprecedented in its history, I think. Although I have actually observed
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Analyst’s Disclosure: I/we have a beneficial long position in the shares of AMD, NVDA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Alex Coffey discusses Micron (MU) earnings and the stock's surge to a new all-time high. He highlights the AI memory chipmaker's fiscal fourth quarter guidance that came in well above expectations, which he sees solidifying strength and continuing momentum.
Bloomberg's Ed Ludlow breaks down Micron's blowout AI-fueled forecast shattering Wall Street's projections, and Qualcomm CEO Cristiano Amon joins to weigh in on the company's own earnings and strong annual sales forecast. Plus, Apple raises prices on some hardware, an extreme measure in direct response to the memory and storage crunch.
Micron Technology (MU +14.11%) had a very good day on Thursday. Apple (AAPL 5.71%) did not. Those two facts may sound unrelated, but one move inspired the other quite directly. And they pulled the major market indexes in opposite directions today.
Micron surged 16% on Thursday after reporting blowout earnings, but the memory chipmaker's gain came at a cost for many other tech stocks. Micron soared on rising memory prices due to limited supply and massive demand, forcing Apple to raise prices on its MacBooks and iPads. As a result of this push/pull dynamic, the stock market moved sideways despite dramatic action underneath the surface.
^DJI data by YCharts
The S&P 500 (^GSPC 0.11%) was down just 0.2% at 1 p.m. ET, while the Nasdaq Composite (^IXIC 0.66%) fell 0.8%. The Dow Jones Industrial Average (^DJI +0.20%) rose 0.4%, buoyed by Caterpillar (CAT +5.30%) hitting an all-time high.
The memory tax Micron's earnings weren't just good. They were borderline absurd. Q3 revenues more than quadrupled year over year while earnings skyrocketed from $1.91 to $25.11 per share. Micron's management followed up on this Street-stumping performance with strong guidance for the next quarter.
Image source: Getty Images.
This is what happens when AI data centers inhale every available memory chip. Industry leaders Micron, Samsung (SSNLF +0.00%), and SK Hynix are prioritizing those orders, and everyone else gets to fight over scraps at premium prices.
Apple found out the hard way. On Thursday morning, the company announced price hikes across its Mac and iPad lineup. The Neo laptop, which launched at $599 specifically to compete with budget-priced Windows machines, now costs $699. That's a 17% price hike months after launch. The company's core customers may be fairly open to price boosts, but these significant changes will probably still undermine Apple's unit sales.
So Micron is up, Apple is down, and many other tech companies on the buying side of the memory pipeline followed suit. As of this writing, Micron has added $233 billion to its market cap overnight while Apple took a $212 billion cut. Many hyperscalers also pulled back in response to Micron's good news. When you add it up, the memory crunch created one big winner and a whole lot of losers on Thursday.
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Looking ahead The memory-chip drama is so powerful that I haven't even mentioned the consumer-side inflation report or the Strait of Hormuz yet. These items usually write their own headlines, but were downgraded to mere distractions today.
Oil prices ticked up by 2% as U.S. negotiations with Iran hit another snag. Iranian leaders don't like a new shipping route through the Strait of Hormuz, and Israel is still fighting in Lebanon.
Friday's main event is the reconstitution of several Russell indexes. Space Exploration Technologies (SPCX 1.03%) will join the Russell 1000. Micron and SanDisk (SNDK +18.73%) are being added to the Russell 1000 Growth index. Apple and Microsoft (MSFT 3.31%), meanwhile, will straddle both the value and growth indexes; make of that what you will. The index updates will drive at least $150 billion of automated trading as iShares Russell 1000 Growth (IWF 1.17%) and other exchange-traded funds (ETFs) strive to keep up with the reshuffled stock lists.
One note unrelated to markets: a pair of major earthquakes struck Venezuela on Wednesday evening, killing more than 160 people with the death toll expected to climb into the thousands. That's not exactly index-moving news, but a reminder that some things matter more than stock indexes.
Anders Bylund has positions in Micron Technology. The Motley Fool has positions in and recommends Apple, Caterpillar, Micron Technology, and Microsoft. The Motley Fool has a disclosure policy.
Noah Kann and Jacob Sonenshine talk about Micron (MU) after the memory chipmaker surged following a blowout earnings report. Noah says the results underscore memory's critical role in the AI era.
The semiconductor market has seen immense growth over the past year, and that momentum continues with Micron Technology (MU) blowing analyst expectations out of the water. Expect ETFs offering pure play exposure to the memory semiconductor industry to benefit in at least the near-term future.
Key Takeaways Micron beat analyst expectations on Wednesday, reporting EPS of $25.11 and revenue of $41.5 billion, while also raising Q4 revenue guidance to $49 billion to $51 billion. A multi-year agreement with Anthropic and soaring memory component demand from data center construction are cementing Micron’s role as a critical component in the AI infrastructure ecosystem. Numerous ETFs are benefiting from Micron’s earnings performance, including DRAM, RAM, and VLUE, which all include Micron as a top allocation. Micron Surpasses Q3 Earnings Expectations After the closing bell on Wednesday, Micron announced Q3 earnings, beating analyst expectations across the board. The company reported EPS of $25.11 and revenue of $41.5 billion, exceeding analyst expectations of $20.39 and $35.1 billion, respectively. Looking ahead to Q4, the company anticipates revenues of $49 billion to $51 billion, surpassing Wall Street expectations of $43.2 billion, according to Yahoo Finance.
On Monday prior to earnings, Micron announced a multi-year agreement with Anthropic to supply memory and storage chips to the AI developer. This deal links the demand of flagship AI models to how the infrastructure is designed, supplied, and deployed at scale.
The continued construction of data centers is driving demand for memory components known as DRAM. Micron announced DRAM revenue of $31.3 billion, beating analyst expectations of $27.5 billion.
Pure-Play Memory Strategies Capitalizing Since its inception in early April, the Roundhill Memory ETF (DRAM) has seen returns of over 150%, and inflows of $17.5 billion. The fund provides pure-play exposure to the companies driving the physical hardware of the AI sector, requiring companies to derive at least 50% of their revenues directly from the memory components industry.
DRAM maintains a highly concentrated portfolio, with three holdings — Micron (24.25%), Samsung Electronics Co (005930) (26.49%), and SK Hynix (000660) (24.26%) — accounting for approximately 75% of the fund’s assets. Micron’s recent earnings beat serves as a major driver for the fund, due to its concentrated portfolio.
For investors seeking increased exposure to the AI memory industry, Roundhill Investments recently launched the Roundhill T-REX 2X Long DRAM Daily Target ETF (RAM). With an expense ratio of 125 basis points, the fund provides leveraged exposure to DRAM, seeking to replicate 2X the daily performance of the underlying ETF, offering investors a tactical way to magnify daily returns.
Broader Funds Benefiting Among other funds with high allocations to Micron is the iShares MSCI USA Value Factor ETF (VLUE). Following the fund’s semiannual May rebalance, Micron now accounts for a 23.4% weighting in the fund, with the next highest weight being Cisco Systems (CSCO) at 4.7%.
The fund tracks the MSCI USA Enhanced Value Index, which focuses on isolating value stocks from the MSCI USA Index, with a heavy emphasis on the tech sector. The strategy employs a sector-neutral and fundamentals-based methodology, to capture value across the broader market.
Due to strong earnings and cash flow growth, Micron’s fundamental metrics, forward and trailing P/E ratio, remain relatively low at 9.11 and 23.70, respectively. This is significantly lower and more value-oriented than the broader AI market, in which a company like Nvidia (NVDA) has forward and trailing P/E ratios of 22.68 and 30.47.
For more news, information, and analysis, visit the Equity ETF Content Hub.
Micron Technology, Inc. delivered another earnings beat and raised guidance, signaling robust AI-driven demand and a strong margin outlook across memory segments. MU and SK hynix may break historic memory cyclicality if AI and data center demand persists, with HBM chips consuming significantly more wafer capacity than traditional DRAM. I maintain a Buy on Micron, targeting a 15x P/E multiple and 30% upside, though a definitive valuation breakout may require further proof of sustained demand and capital discipline.
Seventy percent. That's the share of global memory chip production that artificial intelligence (AI) data centers are expected to absorb in 2026. Set aside what that means for the companies supplying it for a moment and consider what it means for everything else in the tech realm. Smartphones, laptops, cars, medical devices, and televisions are all competing for the remaining 30% of a supply base that used to be far closer to balanced with demand. Market research firm IDC is forecasting that smartphone unit sales will fall by as much as 5% and that PC unit sales will shrink by up to 9%, specifically because of this reallocation. This is a transfer of component manufacturing capacity that is reshaping an entire industry in real time.
Three companies manufacture most of the world's high-bandwidth memory. One of them, South Korean giant Samsung, is not traded on U.S. exchanges. For most domestic investors seeking direct exposure to the most constrained slice of the technology supply chain, that leaves two stocks: Idaho-based Micron Technology (MU +14.96%) and South Korea's SK Hynix (KOSE: A000660), which is preparing to list in the U.S. via a secondary offering on the Nasdaq next month.
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High-bandwidth memory, or HBM, is not standard random access memory. It stacks dynamic random access memory (DRAM) dies vertically and connects them via microscopic silicon channels called through-silicon vias, delivering data bandwidth that flat memory architectures cannot physically match. Every Nvidia Blackwell graphics processing unit requires HBM. Every hyperscaler building the next generation of AI training infrastructure requires it -- and building 1 gigabyte of HBM consumes 4 times the wafer capacity of standard DRAM. When memory manufacturers shift capacity toward HBM, they disproportionately tighten supply for every other memory product on the market.
That dynamic is already visible in pricing. In Micron's fiscal second quarter alone, average DRAM selling prices rose by a percentage in the mid-60s sequentially. NAND prices jumped by 70% in the same period. Memory, historically the most volatile commodity in the semiconductor sector, has transformed into a contracted infrastructure product -- Micron signed its first five-year customer supply agreement in early 2026. Contracts with terms that long have almost no precedent in this industry.
Image source: Getty Images.
Micron Technology Micron Technology's entire 2026 HBM4 production capacity is already sold out under binding multiyear contracts.
Speaking at COMPUTEX 2026, a major information technology trade show in Taipei, Micron Chief Business Officer Sumit Sadana explained the demand math: AI context lengths are growing by a factor of 30 every year, and memory content per server has doubled in the past three years. Those two numbers increase in tandem. Larger models need more context. Longer context requires more memory per inference, and that requires more HBM per server rack. And rising inference workloads demand more of those servers.
Micron is shipping HBM4 chips that can move data at bandwidths greater than 2.8 terabytes per second -- roughly 2.3 times the bandwidth of its previous generation HBM3E chips -- with 20% better power efficiency. Those are the specs that determine which chips get designed into the next generation of AI systems.
Micron is also in the midst of a $200 billion expansion of its U.S. manufacturing capacity, a number that signals where it believes demand is headed through the end of the decade.
With sales of much of its memory supply locked in under multiyear contracts, AI data center demand still growing, and HBM supply structurally constrained, Micron stock looks less like the cyclical semiconductor bet that it used to be, and more like a long-term AI infrastructure asset. That makes it a compelling candidate for investors to steadily dollar-cost average into over time.
SK Hynix SK Hynix holds an estimated 60% to 70% of HBM4 volume allocated to Nvidia's Vera Rubin platform. On June 6, Nvidia and SK Hynix formalized a multiyear co-development agreement covering not just the supply but also the actual design of next-generation AI memory. That's a distinction worth understanding: SK Hynix is not simply a vendor filling purchase orders. It is collaborating with the designer of the world's most advanced AI systems to engineer the memory architecture that those processors will run on for the next several years.
SK Hynix's leading share of the HBM market -- which estimates place between 57% and 62% -- reflects the technological lead it has held since the debut of HBM3E chips, and that it is now extending with the current top-of-the-line HBM4 standard. Bank of America named SK Hynix as its global memory "top pick" and estimated that in 2026, the HBM market would grow by 58% to $54.6 billion. The bank also described the current environment as a "supercycle similar to the 1990s semiconductor boom." SK Hynix also projects that the HBM market will grow at a 30% annualized rate through 2030.
SK Hynix trades on the Korea Stock Exchange, but it's about to become more accessible to U.S. investors. Its upcoming offering of American depositary receipts (ADRs) on the Nasdaq appears to make the stock a compelling candidate for a dollar-cost averaging strategy, given the company's leadership in HBM memory, its deepening partnership with Nvidia, and the central role it's playing in the AI semiconductor supercycle.
The Investment Committee debate Micron's rise and what it means for the rotation and how you should trade it. Jim Lebenthal, Chief Market Strategist at Cerity Partners, joins CNBC's "Halftime Report" to explain why he's buying it here.
Just days after investors dumped AI stocks on fears that valuations had gotten too high, Micron Technology (NASDAQ:MU) returned with a bang.
The memory-chip giant reported quarterly results that crushed expectations, and even issued a stronger-than-expected outlook. This showed that customers have committed $22 billion to secure future chip supplies.
The update sent Micron shares soaring more than 15% in after-hours trading. The rally also helped boost sentiment in the technology sector and brought back gains in semiconductor stocks.
Micron Delivers Another Massive Earnings BeatMicron’s latest results showed how much demand there is for AI infrastructure.
The company reported a revenue of $41.46 billion, beating analyst estimates of $36 billion for its fiscal third quarter. This means the revenue more than quadrupled from the $9.3 billion reported this time last year.
Adjusted earnings per share also came in at $25.11, also beating Wall Street expectations of $21 per share. Additionally, gross margins surged to almost 85%, compared to 39% a year ago. Net income also jumped to $28.24 billion from just $1.89 billion in the year-ago quarter.
The growth was thanks to the demand for memory chips used in AI data centers. Micron is currently the only U.S.-based manufacturer of high-bandwidth memory chips. This is a key component used in advanced AI processors from Nvidia and other technology companies.
Sales in Micron’s data-center business also increased more than 7x from a year ago to $11.5 billion. Cloud memory revenue climbed more than 300%. This was while mobile and client computing all posted strong growth as well.
The company also issued an upbeat forecast for the current quarter. Micron expects revenue between $49 billion and $51 billion and also forecasts adjusted earnings of $30 to $32 per share.
AI Demand Continues To Outrun SupplyPerhaps the biggest takeaway from the earnings report was management’s confidence that memory shortages are likely to continue for years.
CEO Sanjay Mehrotra said he does not yet see a clear point where supply will fully catch up with demand. The company expects tight market conditions to continue beyond 2027.
The earnings report showed that customers have committed $22 billion to secure future chip supplies. The company said it has signed 16 long-term agreements with customers across data centers, consumer electronics, and automotive markets.
These agreements include purchase commitments and cash deposits. These are designed to guarantee supply and reduce uncertainty.
Micron also revealed that its remaining contracted revenue obligations now stand at $100 billion. That figure gives investors valuable insight into future revenue visibility and suggests that customers are willing to lock in supply years in advance.
The company believes that once these agreements are implemented, they could account for half or more of Micron’s total revenue.
Wall Street Is Betting The AI Rally Isn’t OverJust a day before, investors had started dumping AI stocks amid concerns about high valuations and potential Federal Reserve rate hikes. Micron itself had fallen 13% during the selloff.
However, the market rebounded. Stocks tied to the semiconductor industry, including Qualcomm, Sandisk, and Western Digital, gained as investors regained confidence in the AI growth story.
Micron’s rise has already been one of the biggest stories in the market this year. The stock has surged 700% over the past 12 months and has grown into a company valued at more than $1 trillion.
The enthusiasm has become so intense that fund managers are creating new products designed specifically to capitalize on Micron’s volatility.
A newly launched leveraged ETF, the Roundhill T-REX 2X Long DRAM Daily Target ETF, began trading this week. It offered investors amplified exposure to memory-chip stocks. The launch reflects growing demand from traders looking to benefit from the swings seen in AI-related stocks.
Meanwhile, analysts note that large ETF rebalancing flows can magnify market moves during major events such as earnings releases.
Micron’s stock has already had an incredible run. Shares have gained 700% over the past year, pushing the company’s market value above $1 trillion. Even after such a huge rally, many investors believe there could still be more room for growth.
The strong earnings report, the $22 billion in customer commitments, and management’s confidence in future demand all support the bullish case.
At the same time, investors should expect volatility. Micron shares fell 13% just one day before earnings as concerns about AI valuations spread across the market.
That volatility has become part of the story. New investment products are even being launched to help traders take advantage of the large swings in Micron’s stock price. The latest results still suggest that the AI boom remains very much alive.
Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.
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Micron’s NASDAQ: MU fiscal Q3 results and the strength of its outperformance highlight a persistent problem in today’s market: there is a fundamental misunderstanding of the AI trade. AI isn’t a niche; it's not a bubble. It is the evolution of technology, and that evolution is accelerating.
Micron Technology Today
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Micron Technology
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$1,255.00Dividend Yield0.05%
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The impact on Micron is substantial, as it is the primary source of high-bandwidth memory (HBM) stacks, a component found in most GPUs designed for heavy AI training and other advanced workloads. The critical detail is that each NVIDIA NASDAQ: NVDA GPU uses six to 16 stacks of HBM, and each stack is six to 12 chips high, making demand for Micron’s product grow geometrically relative to the underlying AI GPU market.
The takeaway is that HBM markets are sold out, with new supply not expected to meaningfully impact the market until sometime in 2028. Until then, Micron is riding a wave of over-demand and pricing that is driving accelerating hypergrowth and an outlook for sustained strength over the coming six to eight quarters.
Micron, Growing Faster Than NVIDIA, AcceleratesNVIDIA set the gold standard for AI growth, topping out at 265% in Q4 2024, but Micron just lifted the bar. The company's fiscal Q3 take of $41.46 billion was not only up 345% from the prior year, but also nearly 1,550 basis points (bps) above MarketBeat’s reported consensus estimate. Strength was seen across all segments, each growing by an average of approximately 375%, led by Cloud and Datacenter, which account for more than 60% of the business. Cloud Memory grew by 300% and Datacenter ty 650%, with Mobile & Client up by 250% and Automotive & Embedded up by 310%.
Margin news was also strong. The revenue surge drove improvements across the stack, despite higher costs and capital expenditure. Critical details include the operating cash flow, which more than doubled sequentially and quadrupled year-over-year (YOY), and the adjusted free cash flow, which grew by approximately 9X to over $18 billion. Adjusted earnings per share (EPS), the marketwide benchmark for earnings quality, grew by 13X to over $25, nearly $5 or 2000 bps better than expected.
Guidance is the catalyst for this market, as it forecasts another quarter with similar sequential growth, margin strength, and earnings. The revenue forecast of $50 billion was more than 1600 bps better than expected, compounded by an even hotter outlook for earnings. Earnings are expected to exceed $31, further strengthening the company’s financial position.
Micron’s War Chest Swells: Debt FallsMicron’s business windfall is clearly reflected in its balance sheet highlights. The company’s cash balance swelled, up approximately 160% YOY, to top $30 billion, including investments and restricted cash. While liabilities also increased, they did so at a much slower pace, offset by a substantial debt reduction, to leave equity up. Looking ahead, cash flow is expected to remain robust for at least the next two years, barring any unforeseeable technological advancements, suggesting further cash and equity gains in the coming periods.
Analyst trends will likely strengthen now that fiscal Q3 results and fiscal Q4 guidance have been released. As it stands, the trends are robustly bullish, including numerous price target boosts in the weeks leading up to the earnings release. The consensus of 39 is a Buy, with a 90% Buy-side bias in the data, and a price target of $1,103. However, it is not the average price target that matters; it is the trend. June revisions pushed the high end of price targets towards $2,000, representing a 100% increase in stock price from the pre-release closing price.
Looking at Micron on a valuation basis, MU stock remains deeply undervalued, based on the pre-release earnings outlook. The post-release earnings outlook makes the value deeper, suggesting this stock could easily rise by 200% to 300% in the near-term and more over the long. Micron’s biggest risk is industry cyclicality and potential for oversupply, but that is a problem for the future. Supply-and-demand metrics, the timeline for capacity expansions, and analysts' commentary suggest there is little risk of oversupply at this time. The more likely scenario is that the undersupply persists well into 2028 and potentially longer.
Price action reflects the strength of the results and guidance, indicating the uptrend will likely continue. MU shares gained more than 15% to hit fresh highs following the release, amid rising market momentum. In this scenario, MU shares will likely continue higher and may accelerate. Not only is the outlook robust, but FOMO may set in the market, spurring sidelined cash to move.
Should You Invest $1,000 in Micron Technology Right Now?Before you consider Micron Technology, you'll want to hear this.
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Robotics and automation are rapidly becoming essential infrastructure across healthcare, manufacturing, logistics, and many other industries.
"Physical AI" is coming to the United States, and there are four ways that investors can gain exposure to this new robotics revolution. Plus, learn which seven companies are most positioned to benefit as intelligent robots enter the workforce.
HomeIndustriesComputers/ElectronicsEarnings OutlookEarnings Outlook‘It is hard to overstate how significant last night’s earnings were’Published: June 25, 2026 at 10:38 a.m. ET
The technology sector is increasingly taking its cues from an understated memory-chip manufacturer based in Boise, Idaho.
That company is Micron Technology MU, which Daniel O’Regan, managing director for equity trading at Mizuho, calls “probably a top 3 most important stock in the world.” In his book, when it comes to market influence, Micron ranks behind semiconductor powerhouse Nvidia NVDA and perhaps Alphabet GOOGL GOOG.
Micron Technology (MU +16.12%) has become one of the key players in the artificial intelligence (AI) boom. When we think of AI, our first thought may be the chips powering AI tasks -- but these chips must be accompanied by something else, and that's memory and storage capabilities. This is where Micron comes in, offering a wide range of solutions.
And this has translated into explosive growth for the company. Earnings have reached record levels, and the latest quarterly report reinforced this trend. Micron's revenue soared in the triple digits to more than $41 billion, and net income jumped in the quadruple digits to $28 billion. Both largely beat analysts' estimates. The company's message was positive too: Demand from AI customers is soaring, and we may be in the early stages of this growth opportunity.
As for Micron stock, investors have recognized the company's potential and piled in: The shares have skyrocketed in recent times, gaining more than 260% this year alone.
Considering all of this, is Micron a buy after its blowout earnings report? Let's find out.
Image source: Getty Images.
A memory specialist First, a bit of background on Micron. The company makes various types of memory and storage, including DRAM, NAND, and HBM. These products, offering memory as a computer or processor works, long-term storage, and fast memory access, cover the various needs of AI projects. Customers, as they run AI workloads, need chips from players like Nvidia, but they also need this memory capacity -- and that's created enormous demand for Micron and others in the field.
In fact, demand is so high that, even with multiple players in the space, from Seagate Technology to SK Hynix, it's steadily surpassed supply. This means that competition hasn't been a problem for Micron.
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All of this has led to tremendous earnings growth for this memory player, as we've seen in recent quarters, and the company confirmed the trend in the latest period. Quarterly revenue reached record levels for the fifth consecutive time. Free cash flow climbed to record levels of $18 billion, and importantly, gross margin came in at more than 84%. Gross margin is particularly key because it shows the company is highly profitable on sales.
16 customer agreements Micron also signed 16 customer agreements that offer the company and investors visibility on revenue ahead, reinforcing the idea that the demand we've seen so far is set to continue. The deals, with data center, consumer, and automotive customers, run through 2030 and involve commitments to purchase a certain volume of memory products. The company expects $22 billion in commitments from the deals signed so far, and it expects half of its revenue to eventually come from such strategic agreements.
This visibility on revenue ahead is positive as it helps guide Micron as it invests in areas such as manufacturing capacity.
"The early innings" of AI And speaking of the future, the company offered an extremely positive message, saying we're in "the early innings" of the AI revolution and that the expansion of AI into various industries represents key memory opportunities. For example, humanoid robots carry 10 times the memory of a vehicle with a driver assistance system -- this means that, as robotics systems advance, Micron may see a new and lasting wave of growth down the road.
Now let's return to our question: Considering all of this exciting news, is Micron a buy? Or is it too late to get in on this stock after its enormous gain? Though Micron's stock has soared, and its valuation has climbed, the valuation level still remains reasonable.
MU PE Ratio (Forward) data by YCharts
Today, Micron trades at 16x forward earnings estimates, which is lower than levels just a year ago -- and the stock remains cheaper than other tech giants such as Nvidia and Alphabet, for example.
This price level, along with clues that suggest Micron may benefit from the AI boom for quite some time make now -- even after the stock's big gain -- a good time for growth investors to add this stock to their portfolios.
NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) and Micron Technology (NASDAQ:MU) both posted blockbuster AI infrastructure quarters, but the market reacted in opposite directions. NVIDIA sells the compute. Micron sells the memory that keeps those GPUs fed.
Comparing them now makes sense because each just told investors something different about where AI hardware spending actually lands in 2026.
Blackwell Carries NVIDIA. HBM Carries Micron. NVIDIA’s Q1 FY27 report on May 20, 2026 showed revenue of $81.615 billion, up 85.23% year over year, with Data Center alone at $75.246 billion. Networking inside that segment grew 199%, a number that says NVLink and Spectrum-X are pulling weight, not just GPUs. Non-GAAP EPS landed at $1.87.
Jensen Huang framed the moment bluntly: “The buildout of AI factories, the largest infrastructure expansion in human history, is accelerating at extraordinary speed.”
Micron’s Q2 FY26 earnings report on March 18, 2026 told a wilder cyclical story. Revenue hit $23.86 billion, up 196.29%, with non-GAAP EPS of $12.20 against a $8.73 estimate. Cloud Memory revenue alone reached $7.75 billion at a 66% operating margin.
CEO Sanjay Mehrotra said memory has become “a strategic asset” for hyperscale customers, and the board approved a 30% dividend hike to back that view.
Platform Moat vs. Capacity Bet NVIDIA leans on CUDA, NVLink Fusion, and the announced Vera Rubin platform to lock customers into a full stack. Roughly half of Data Center revenue still comes from hyperscalers, and management is pushing into sovereign and industrial AI to diversify. The catch is China: zero H20 Data Center shipments this quarter, and forward guidance assumes that stays at zero.
Business Driver NVIDIA Micron Main growth engine Blackwell GPUs, NVLink networking HBM and DRAM for AI accelerators Guidance $91.0B Q2 revenue $33.50B Q3 revenue Gross margin 75.0% non-GAAP 74.4% GAAP, guiding to ~81% Micron’s bet is physical. Capex of $6.39 billion in a single quarter funds HBM capacity that order books reportedly stretch into 2027. Being the only U.S.-based memory manufacturer matters for sovereign AI buyers, and a forward P/E of 11 suggests the market still treats this as cyclical. NVIDIA’s P/E sits near 32, which is hardly cheap but reflects platform durability.
The Market Already Voted Differently Since reporting, NVIDIA shares are down 10.38% to $200.04. Micron is up 127.9% to $1,051.77, although it dropped 13.18% on June 23 ahead of its next earnings report.
Polymarket traders give Micron a 95.2% probability of beating quarterly earnings, while NVDA’s near-term crowd consensus clusters at $195 to $210. I will be watching whether Micron’s gross margin actually reaches the guided 81% and whether NVIDIA’s $119 billion in supply commitments converts cleanly.
NVIDIA for Durability, Micron for Torque For investors researching AI exposure that survives a memory price reset, NVIDIA’s profile stands out. The software moat and networking growth give the platform a second leg the bears keep underrating, even with China at zero.
For investors comfortable with cyclicality, Micron offers more torque, because HBM scarcity is real and the forward multiple still leaves room. The shared risk on both theses is a softening in hyperscaler capex guidance later this year, the one variable that pressures both stories at once.
Key Takeaways Micron's fiscal Q3 earnings and revenues surged as AI-led memory demand lifted data center sales.Micron signed 16 strategic customer agreements covering about 20% of DRAM and one-third of NAND volume.Micron expects Q4 revenues of about $50B and sees DRAM and NAND supply-demand staying tight beyond 2027. Micron Technology (MU - Free Report) reported third-quarter fiscal 2026 non-GAAP earnings of $25.11 per share, beating the Zacks Consensus Estimate by 17.39%. The company reported earnings of $1.91 per share in the year-ago quarter.
Revenues soared 345.7% year over year to $41.46 billion and surpassed the Zacks Consensus Estimate by 12.91%. Revenues jumped 73.7% sequentially. The upside was driven by robust AI-led memory demand, with data center revenues exceeding $25 billion, an annualized run rate of more than $100 billion.
Micron announced 16 strategic customer agreements (SCAs) across data center, consumer and auto markets in the reported quarter. These agreements represent roughly 20% of DRAM volume and one-third of NAND volume over the covered period.
The company expects approximately half or more of its revenues to eventually be under SCAs. Under the agreements signed so far, Micron projects $22 billion in cash deposits and related financial commitments, supporting longer-term supply visibility and financial predictability.
MU’s Q3 Top-Line DetailsMicron’s top-line growth benefited from tight DRAM and NAND supply, stronger pricing and accelerating demand tied to AI infrastructure. MU noted that industry demand for both DRAM and NAND continues to significantly exceed supply.
DRAM revenues were $31.3 billion, accounting for 76% of total revenues in the fiscal third quarter. DRAM revenues increased 67% sequentially, helped by low-single-digit bit shipment growth and a low-60s percentage increase in average selling price (ASP).
NAND revenues were $9.9 billion, representing 24% of total revenues. NAND revenues increased 99% sequentially, driven by a mid-single-digit increase in bit shipments and a mid-80s percentage rise in ASP.
MU’s Business Units Set RecordsCloud Memory Business Unit revenues were a record $13.77 billion, up 77.7% sequentially and 306.6% year over year.
Core Data Center Business Unit revenues were a record $11.52 billion, up 103% sequentially and 653.2% year over year.
Mobile and Client Business Unit revenues were a record $11.52 billion, up 49.4% sequentially and 254% year over year. The sequential revenue growth was driven by higher pricing.
Automotive and Embedded Business Unit revenues were a record $4.63 billion, up 71.1% sequentially and 311.2% year over year. The improvement reflected higher pricing and higher bit shipments.
MU’s Q3 Margins ExpandNon-GAAP gross margin was 84.9% in the reported quarter, up from 74.9% in the fiscal second quarter and 39% in the year-ago quarter.
Cloud Memory Business Unit gross margin expanded to 83% from 74% reported in the prior quarter, driven by higher pricing. The company reported Cloud Memory gross margin of 58% in the year-ago quarter. On a sequential basis, the core Data Center Business Unit’s gross margin improved to 87% from 74%, aided by higher pricing and a favorable mix. The company reported Data Center gross margin of 38% in the year-ago quarter.
Mobile and Client Business Unit gross margin reached 87% compared with 79% in the prior quarter and 24% in the year-ago quarter. Automotive and Embedded Business Unit gross margin surged to 79% compared with 68% in the prior quarter and 26% in the year-ago quarter.
Non-GAAP operating expenses were $1.52 billion, up 6.8% year over year and 34% sequentially.
In the third quarter of fiscal 2026, non-GAAP operating income came in at $33.68 billion, a significant rise from $2.49 billion reported in the year-ago quarter and $16.46 billion reported in the previous quarter.
Micron’s Balance Sheet Shows Strong Liquidity LevelMU exited the quarter with $30.2 billion in cash, marketable investments and restricted cash. Liquidity was $32.2 billion at the end of the fiscal third quarter.
Micron generated $25.39 billion in operating cash flow in the quarter. Capital expenditures, net of proceeds from government incentives and asset sales, were $7.1 billion, resulting in adjusted free cash flow of $18.3 billion.
The company declared a quarterly dividend of 15 cents per share, payable on July 21, 2026, to shareholders of record as of July 6. Micron did not repurchase shares during the fiscal third quarter.
MU’s Guidance Points to More StrengthFor the fourth quarter of fiscal 2026, Micron expects revenues of $50 billion, plus or minus $1 billion. The company projects a non-GAAP gross margin of approximately 86%.
Non-GAAP operating expenses are expected to be approximately $1.65 billion. Adjusted earnings are projected at $31 per share, plus or minus $1, based on roughly 1.15 billion diluted shares.
Micron now expects supply-demand conditions for both DRAM and NAND to remain tight beyond calendar 2027. In DRAM, the company expects industry DRAM bit shipments in calendar 2026 to grow in the low to mid-20s percentage range, slightly above MU’s prior outlook. In NAND, Micron expects industry NAND bit shipments in calendar 2026 to grow approximately 20%, unchanged from its prior expectations.
Stocks to ConsiderCurrently, Micron sports a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks in the broader Zacks Computer and Technology sector are Credo Technology (CRDO - Free Report) , Hewlett Packard Enterprise (HPE - Free Report) and Microchip Technology (MCHP - Free Report) . Each of the three stocks sports a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Credo, Hewlett Packard Enterprise and Microchip is currently pegged at 39.3%, 31.98% and 36.82%, respectively. Year to date, shares of Credo, Hewlett Packard Enterprise and Microchip have jumped 86.9%, 102.9% and 45.1%, respectively.
Item 1 of 2 The Micron logo in this illustration taken June 11, 2026. REUTERS/Dado Ruvic/Illustration
[1/2]The Micron logo in this illustration taken June 11, 2026. REUTERS/Dado Ruvic/Illustration Purchase Licensing Rights, opens new tab
CompaniesSAN FRANCISCO, June 25 (Reuters) - Memory chipmakers have for decades been trapped in boom-bust cycles, with capacity buildouts hitting the market just as demand craters. Micron, Samsung and SK Hynix are now trying to convince investors this time is different, arguing long-term deals will keep cash flowing even if the datacenter boom bursts.
Micron (MU.O), opens new tab said on Wednesday customers such as Nvidia (NVDA.O), opens new tab had committed $22 billion to lock in supplies of memory chips, playing up huge growth in five-year "take-or-pay" deals that require clients to either buy its chips or hand over cash.
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The U.S. company's deals follow the footsteps of SK Hynix (000660.KS), opens new tab and Samsung (005930.KS), opens new tab, which have also been signing long-term supply agreements with their customers.
However, it is still a risky bet and memory stocks remain prone to wild market swings, analysts said. Days before Micron's results, a tech stocks rout led by memory makers wiped out over $1 trillion in value on worries over lofty valuations.
"The main question heading into Micron earnings... was how durable memory pricing power really is. What they showed through longer-term strategic agreements is that visibility is improving and any downside risk is getting pushed further out," said Jake Behan, ETF-provider Direxion's capital markets head.
"What matters from here is not whether memory pricing eventually normalizes as we know it likely will, it is about who captures and monetizes that pricing power while it lasts."
Memory has become so critical to AI chips such as those made by Nvidia (NVDA.O), opens new tab that customers no longer treat Boise, Idaho-based Micron as a commodity supplier to be played off against rivals for lower prices, but as a strategic partner whose factory expansions they must underwrite to lock in supply.
Despite joining the $1 trillion valuation club earlier this year, Micron reported an annual loss of $5.3 billion as recently as 2023, driven by a collapse in spending on consumer electronics after the frenzy of pandemic gadget upgrades.
"Customers have put billions of dollars on Micron's balance sheet as a show of confidence and their commitment toward this new business model," its chief business officer, Sumit Sadana, told Reuters.
Despite agreements that are as good as cash contracts, Micron said it will take time to build new factories, keeping supplies tight until at least 2027.
MEMORY CHIPMAKERS HAVE TRIED LONG-TERM DEALS BEFOREThe famously cyclical memory industry has tried to lock in long-term deals before. But past attempts failed to smooth ups and downs because memory was a commodity, letting electronics makers swap suppliers and squeeze prices at will.
Even with AI, long-term hardware agreements could stand so long as customers see real demand and application. Any crack, whether a wobble in orders or doubts about the AI buildout, could send them back to the negotiating table.
"The bear case is that these contracts only hold while supply remains tight. If demand softens and the market turns, there is a risk they are renegotiated or abandoned, which would quickly reintroduce volatility," said Ben Barringer, head of technology research at Quilter Cheviot.
But this time things are different as there is real money on the line. Having customers pay cash to lock in commitments means Micron earns money regardless of whether the agreements go through or not.
It also gives the broader AI demand narrative some legitimacy, showing that customers think it is worth spending billions just to ensure chip orders are confirmed.
Reporting by Stephen Nellis in San Francisco, Aditya Soni and Zaheer Kachwala in Bengaluru; Editing by Pooja Desai and Arun Koyyur
Our Standards: The Thomson Reuters Trust Principles., opens new tab
James Demmert discusses the technology sector, how oil prices are influencing investor sentiment, and whether the rally can broaden beyond tech. He also offers his takeaways from Micron's (MU) earnings and what it signals for the market as the report reinforces demand for AI.
Micron Technology (NASDAQ:MU | MU Price Prediction) has climbed from roughly $127.60 a year ago to past $1,048 as the AI memory cycle accelerated. After a blowout fiscal Q3, our proprietary model says the easy money has already been made.
Our 24/7 Wall St. price target for Micron is $889.73, implying 15.14% downside from the current $1,048.51 level. We rate shares a sell with high confidence (90%). The trailing valuation is fully extended, insider selling has been unusually heavy at peak prices, and the forward setup leaves limited room for a positive surprise.
24/7 Wall St. Price Target Summary Metric Value Current Price $1,048.51 24/7 Wall St. Price Target $889.73 Upside/Downside -15.14% Recommendation SELL Confidence Level 90% A Note Before We Begin Our 24/7 Wall St. price target of $889.73 sits below where Micron trades today. Real upside could come from HBM4E scaling to volume production in calendar 2027 or fresh multi-year Strategic Customer Agreements extending revenue visibility well past fiscal 2027. Consider our target one datapoint among many. A detailed bull case appears below.
A Historic Run Built on a Blowout Quarter Micron’s price action has been extraordinary. Shares are up 267.54% YTD, 721.72% over one year, and 39.62% in the past month.
The trigger was Q3 FY2026 earnings released June 24: revenue of $41.46B versus $35.25B consensus, a 17.60% beat and +345.7% YoY, with non-GAAP EPS of $25.11 versus $20.28 expected. GAAP gross margin hit 84.6%, a 46.9 point YoY expansion.
CEO Sanjay Mehrotra called the results evidence of “the strategic value of memory in the AI era.” Q4 guidance of $50B in revenue and $31 EPS at the midpoint suggests momentum continues. Shares now sit just 16% below the 52-week high of $1,213.56.
Why Bulls See a Breakout Ahead Bulls have ammunition. 39 of 44 analysts rate MU a buy, with a consensus target of $1,022.92. HBM4 is already in high-volume shipments to the lead customer, and HBM4E volume production is teed up for 2027. Free cash flow hit $18.30B in Q3 alone, up 995% YoY, and management approved a 30% dividend increase.
If Q4 lands at the $31.00 EPS guide, the forward multiple compresses fast. Our bull scenario tags MU at $1,284.33 over 12 months, a 22.49% return, with a path to $1,305.77 by May 2027.
Several analysts expect a strong upside. Barclays analyst Tom O’Malley raised the firm’s price target on Micron to $2,000 from $1,175 and keeps an Overweight rating following the earnings report while BofA raised the firm’s price target to $1,550 from $1,500 and keeps a Buy rating. Citi raised the target to $1,400 with a Buy rating and Goldman Sachs raised the target to $1,100 with a Neutral rating.
The Risks Worth Watching Insider activity is the loudest warning. CEO Mehrotra sold across 63 separate transactions on May 1 and May 29, with May 29 prints between $942.14 and $979.37. Capex ran $7.83B in Q3, and a $325M loss on debt prepayments hit the quarter.
Memory remains cyclical, HBM4 carries lead-customer concentration risk, and Reddit’s WSB sentiment registers 40 versus 88 in options threads, signaling fraying conviction at the edges.
Bulls would argue insider selling reflects portfolio diversification at all-time highs rather than a fundamentals call, and that record capex locks in HBM share through 2027. Our bear case implies $650.68 over 12 months, a 37.94% drawdown.
The Risk Isn’t Worth the Reward Here The 24/7 Wall St. price target of $889.73, a sell rating, and 90% confidence reflect a stock that has priced in two years of perfect execution inside six months. We would be a buyer below $750, where forward P/E sinks toward 13x.
We would stay sidelined above $1,000 until Q4 actuals confirm the $31 EPS guide and Strategic Customer Agreement detail emerges. After a +538% move since September 2025, the setup favors patience over chasing.
Micron Price Prediction 2026-2030 Here is where our model projects Micron could trade as the AI memory cycle matures and pricing normalizes from current peaks.
Year 24/7 Wall St. Price Target 2026 $889.73 2027 $870.00 2028 $855.00 2029 $842.00 2030 $832.75 These projections assume Micron executes on HBM4 and HBM4E ramps while memory pricing mean reverts. Significant upside could come from a longer-than-expected AI capex cycle; meaningful downside could come from a hyperscaler digestion phase or a HBM share-loss event.
Micron Technology stock is soaring this morning after the company posted blockbuster Q3 results, featuring a nearly 350% year-over-year increase in revenue to $41.46 billion.
Still, the broader semiconductor complex is not following Micron’s lead – with Intel INTC, Advanced Micro Devices Inc, and even Nvidia failing to participate in the rally on Jun. 25.
While that may seem a bit puzzling on the surface, there’s actually three very simple reasons why these chipmakers aren’t moving in sync with Micron stock today.
In its earnings release, Micron confirmed that its High-Bandwidth Memory (HBM), the hyper-fast memory stacked directly onto artificial intelligence (AI) chips, is completely sold out through year-end, with customers locking in $22 billion in agreements.
While that’s incredible for MU shares, it actually highlights a severe industry supply constraint.
If the likes Nvidia or AMD can’t secure enough HBM from suppliers (Micron or SK Hynix), they can’t ship their top-tier AI graphic processing units (GPUs), including the Blackwell architecture or the MI300 series.
Micron Technology’s tight supply cap confirms that compute chipmakers are physically limited in how fast they can scale their own near-term revenues – a broader concern that is clearly reflected in their muted performance today.
The broader semiconductor sector has been dealing with an intense multi-day wave of profit-taking.
Investors are reassessing stretched valuations and demanding that astronomical capital expenditure from big tech hyperscalers translates into immediate profits.
Because names like Intel and AMD have already priced in massive, flawless growth, a solid update from a sub-component supplier like Micron is being treated as a “sell-the-news” event for the rest of the tech stack.
Note that Advanced Micro Devices Inc and INTC are currently going for about 85x and more than 200x forward earnings; so the initial pre-market gap up simply gave institutional traders a “highly liquid” exit point to lock in profits.
Continued pressure on Intel and AMD shares makes sense also because these companies actually face entirely different architectural and competitive pressures.
INTC is battling high turnaround execution costs as it positions itself as a Western foundry choice, and Advanced Micro Devices is locked in an expensive market-share war with Nvidia in the data center.
A spike in memory pricing pads MU’s margins immediately, but it doesn’t solve Intel’s execution timeline or alter AMD’s market share positioning against Nvidia.
That said, Wall Street hasn’t thrown in the towel on either. Both remain “Buy” rated among experts, with the most ambitious price targets calling for well over 20% upside from their current levels.
Neither of the two chipmakers, however, pays a dividend to attract income-focused investors.
In recent weeks, the market has shown artificial intelligence fatigue, as concerns have mounted and investors wonder whether the rally can continue without a pullback first.
However, some of the AI-bottleneck trades remain as strong as ever.
The AI memory maker Micron (MU +16.12%) just reported blowout third-quarter earnings results. Earnings per share of $25.11 beat Wall Street consensus estimates by $4.72. Revenue of $41.5 billion beat estimates by $6.4 billion.
Revenue quadrupled from the prior year. Furthermore, Micron is now guiding to $50 billion in revenue for its current quarter.
Micron also said it has secured 16 contracts with customers, including data centers and automakers, in the three- to five-year range that could bring in $22 billion. This provides investors with solid visibility into future revenue.
Micron stock traded nearly 14% higher, as of 11:50 a.m. ET.
While the company has done incredibly well, with its stock up over 800% in the past year, there is still debate about how far memory stocks can run.
Here’s why everyone is talking about Micron.
Image source: Micron.
Can a historically cyclical stock become a long-term AI powerhouse?Micron is one of the leading memory manufacturers, specifically regarding dynamic random-access memory (DRAM) and NAND flash memory.
Memory is key to feeding data to graphics processing units (GPUs), so as GPU clusters and data centers scale, more memory is needed.
Analysts at UBS have previously said that DRAM is likely to be constrained until at least halfway through 2028, while NAND is likely to be constrained until at least the end of 2027.
However, prior to this AI supercycle, Micron and other memory makers were viewed as cyclical stocks due to the difficulty in balancing supply and demand within a reasonable time frame.
Some Wall Street analysts still think this is the early innings for the memory trade.
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"We are seeing no cracks in AI demand on the chips/hardware or software front which gives us a bright green light to own the core tech winners into year-end," Wedbush analyst Dan Ives said in a recent research note.
But not everyone is entirely sold.
Bernstein analyst Mark Newman thinks Micron’s new strategic customer agreements could include pricing ceilings, which would limit how much Micron could raise memory prices.
"We wonder if the ceiling suggests limited headroom," he wrote in a recent research note, suggesting these contracts likely wouldn’t be able to avoid cyclicality.
Still subject to the AI tradeMicron has undoubtedly been on a phenomenal run and looks poised to benefit from the AI trade as much as any company.
The question investors need to ask is what happens to companies like Micron if the AI trade hits a wall, because the business and demand for memory are really dependent on AI.
It’s quite possible that the current AI run lasts much longer than investors think, or that AI will turn into a much bigger winner long term, even if it runs into some obstacles along the way.
On the surface, Micron’s valuation of close to 19 times forward earnings is not seemingly out of line. But the big question is what happens to the earnings, which have risen 1,368% year-over year.
If long-term investors still want exposure to memory, now a key part of the AI trade, I think they can buy Micron. But they should dollar-cost average to smooth out their cost basis over time and be prepared for volatility.
Liz Ann Sonders with @CharlesSchwab explains what she calls a "rotating concentration" in tech, pointing out that investors are pouring out of the Mag 7 and into other rising tech giants like Micron (MU). On the "great chip dip" in AI semiconductor names like Nvidia (NVDA), Liz Ann talks about the various factors she sees eating into price action of it and related stocks.
Pre-market futures, following Micron’s (MU - Free Report) epic fiscal Q3 earnings, are all in the green — led by the Nasdaq’s +700 points at this hour. The blue-chip Dow is showing gains of +130 points, the S&P 500 +60 and the small-cap Russell 2000 is +14 points presently.
We also preside over a massive amount of economic data this morning, most of which is non-troubling overall. Let’s start with the preferred gauge of inflation for the Federal Reserve, or at least its leadership from the previous leadership.
PCE Hits 3-Year High: +4.1%Personal Consumption Expenditures (PCE) for May came in mostly as expected this morning, which is to say mostly higher — tracking increased inflation, even when stripping out higher gasoline prices at the pump. Headline PCE month over month actually came in 10 basis points (bps) below expectations at +0.4%, matching the unrevised prior month. Core PCE for the month rose +0.3%, in-line with estimates and matching the upwardly revised April tally.
Year-over-year PCE is typically where the action is, and here we see the headline number at +4.1% — the highest since April of 2023, though reaching what analysts had been expecting. This is a 30 bps climb from the previous month, and the third-straight month jumping out of its prior longer-term range between +2.2% and +2.8%. (Keep in mind the Jerome Powell-led Fed consistently aimed for +2.0% inflation.) Core PCE year over year is the highest level since October of 2023 at +3.4%, up 10 bps month over month.
Personal Income last month jumped to +0.7% from a 0.0% figure for April — the second-straight rotation from flat payrolls to blossoming higher going back to February. The +0.7% figure is the loftiest since July of 2025. Personal Spending also reached +0.7%, up 10 bps from estimates and +20 bps month over month. Real Spending, adjusted for inflation, was reduced to +0.3%. Long story short here: the consumer continues to earn (spottily) and continues to spend.
Q1 GDP Revised a Half-Point HigherThe second and final revision to Q1 Gross Domestic Product (GDP) surprisingly jumped +0.5% to +2.1% from the first revision a month ago. Meanwhile, Consumption dropped nearly 100 bps from the previous read to +0.5%, the weakest number since Q1 2022. GDP Price Index for Q1 winds up at +3.6%, a 10 bps bump from the prior print, while core GDP in the quarter reaches +4.4%.
Weekly Jobless Claims Remain in RangeThursday morning almost always brings us Weekly Jobless Claims, and results have typically stayed manageable and historically strong: 215K on Initial Jobless Claims is the first print below 220K in a month, and follows a slightly upwardly revised 227K the previous week. Continuing Claims mark the second consecutive 1.8M figure at 1.821 million. Both long- and short-term jobless claims remain in a range historically consistent with a healthy labor market.
Durable Goods Go Negative, As ExpectedFinally this morning, May Durable Goods Orders dropped to -4.5% from an upwardly revised +8.5% reported for April. This is a half-point below where analysts has projected, and is the weakest result since June of 2024. However, we can see something of a mean reversion when we strip out Transportation (aka “aircraft”) costs: +1.3%, up from +1.1% the prior month, which is the strongest figure since June of 2023.
Non-Defense, ex-aircraft— a proxy for typical monthly capital spending — came in at +1.6%, higher than projected and the best monthly tally since March. This, aligned with Personal Spending from the PCE figures, demonstrates we’re seeing healthy enterprise spending as of last month, as well. Shipments shrank a tad month over month — +0.3% from +0.5% previously.
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Micron Technology Inc (NASDAQ:MU) shares soared more than 15% to a record high of around $1,208 Thursday as analysts cheered a wave of long-term strategic agreements reshaping the investment case for the memory chipmaker.
Bank of America reiterated its Buy rating and lifted its price target to $1,550 from $1,500, while Wedbush maintained its bullish stance, with both firms pointing to Micron's growing portfolio of strategic customer agreements (SCAs) as a defining development for the sector.
Micron reported fiscal third-quarter revenue of $41.5 billion, up 74% year-over-year and well above the Street's $35.9 billion estimate. Data center revenue hit an annualized run rate of approximately $100 billion.
Gross margin came in at 84.9%, topping consensus of 81.7%, while non-GAAP earnings per share of $25.11 doubled quarter-over-quarter and surpassed expectations of $20.86.
Fourth-quarter guidance was equally striking, with Micron projecting revenue of $50.0 billion against the Street's $43.6 billion estimate. Gross margin is expected to reach roughly 86%, with non-GAAP EPS guided to $31.
The headline story was not just the results but what lies ahead. Micron now has 16 SCAs in place, with 14 of those carrying cumulative minimum revenue commitments of approximately $100 billion over the remaining agreement terms. The deals include price floors and ceilings, are backed by cash deposits and financial commitments, and carry no termination provisions.
Bank of America noted the agreements currently represent about 20% of DRAM output and one-third of NAND sales, but Micron expects SCAs to eventually cover at least half of total company revenue, generating roughly $100 billion in remaining performance obligations.
"The agreements are guaranteed by cash deposits and financial commitments and do not contain provisions allowing for the termination of terms," Wedbush noted, underlining the structural shift this represents for a sector historically defined by cyclical boom and bust.
With free cash flow margins expected to approach 50-60%, both firms flagged a significant inflection in shareholder returns. Micron announced plans to return 100% of excess free cash flow to shareholders beginning in December, once CHIPS Act restrictions on certain uses of cash expire.
Bank of America said buyback activity is likely to step up materially, noting that even $32 billion in repurchases for fiscal 2027 would represent only about 25% of potential free cash flow generation. The firm sees shares implying a roughly 10% free cash flow yield at current levels.
Wedbush, meanwhile, described the quarter as a "drop the mic" moment for Micron and the broader memory trade, saying the results demonstrated that demand for NAND and DRAM continues to significantly exceed industry supply.
"With greater nervousness around the AI trade... this shows the memory and chip trade is well-intact and still in the early stages of playing out," Wedbush said, adding that it sees no cracks in AI demand on the hardware or software front.
The firm also flagged positive read-throughs for semiconductor capital equipment makers, noting Micron raised its 2026 capital expenditure forecast and signalled meaningfully higher spending in 2027.
Micron Technology (NASDAQ:MU | MU Price Prediction) had signed 16 long-term customer agreements, 14 of them locking in roughly $100 billion in minimum guaranteed revenue through 2030, and the stock was up 16% because, in her words, “Memory has always been just been boom and then bust. But Micron is essentially telling everyone that’s completely over.”
That claim matters in an industry defined by cycles. DRAM glut, DRAM shortage, repeat. So what did Micron actually do, and why are people who lived through the 2019 and 2023 downcycles willing to underwrite a different ending this time?
What the contracts actually changed Micron’s fiscal Q3 revenue came in at $41.456 billion, a 17.60% beat on consensus and 345.72% year-over-year growth from the $9.3 billion Micron printed in the prior-year quarter. Non-GAAP EPS landed at $25.11 against a $20.2843 consensus, the seventh consecutive quarter of beating Wall Street.
The margin line is where the cycle thesis wobbles. GAAP gross margin was 84.6%, against 37.7% a year earlier. Software companies have 84% gross margins. Memory companies, historically, have run a fraction of that. Micron is guiding Q4 to around 86% on $50 billion plus or minus $1.0 billion in revenue. As Partsinevelos framed it, “they can determine the pricing right now, which is great for them to keep those margins up.”
CEO Sanjay Mehrotra’s framing in the press release was that “multi-year Strategic Customer Agreements will significantly enhance the durability and predictability of Micron’s strong financial performance.” The hyperscalers building AI infrastructure are willing to pre-commit to HBM and DDR5 capacity through the decade because they cannot afford a repeat of the 2024 shortage. Micron’s Cloud Memory segment alone did $13.769 billion, with Core Data Center another $11.524 billion.
Qualcomm’s parallel bet Qualcomm (NASDAQ:QCOM) CEO Cristiano Amon pitched the same direction from the other side. Qualcomm raised its non-handset revenue target to $40 billion by 2029, nearly double its prior forecast, with roughly $15 billion from data center. And Partsinevelos noted Qualcomm “named META as its first customer for its new data center CPU, and said it signed two hyperscale deals for custom chips, one in the United States, one Chinese.”
Amon’s answer to how you guarantee any of this was about supply. “I have secure the capacity from the manufacturer as well as memory,” he said, “we’re very confident in the forecast we provided.” That capacity comment validates Micron. Qualcomm’s Q2 handset revenue had already fallen 13% year-over-year to $6.024 billion, with memory supply constraints among Chinese OEMs cited as the cause. The thing squeezing Qualcomm’s phone business is the thing minting Micron’s margins.
Qualcomm shares rose 12% on the data center news, a smaller move than Micron’s, partly because at a $215.827 billion market cap the company is still mostly a handset business until the Dragonfly C1000 actually ships to Meta in 2028.
The execution problem nobody is talking about yet Micron has to spend to make the $100 billion show up. Q3 capex was $7.826 billion, up 166.37% year-over-year, and the company has signaled capex over $40 billion next year, with roughly $20 billion going to construction and clean rooms. That is a fab-building number. Free cash flow was a robust $18.304 billion in the quarter, so the cash is there, but the rule of memory has always been that whoever builds capacity in the boom regrets it in the bust. The contracts are supposed to be the insurance policy against exactly that.
You can see the market wrestling with the structural-versus-cyclical question elsewhere. UBS tripled Micron’s price target last month, and the stock crossed $1 trillion in market cap alongside SK Hynix. Even retail cannot agree whether this is the end of the cycle or the loudest part of it.
The case for “different this time” rests on contracts whose enforceability has not been tested in a downturn, capacity that does not exist yet, and AI capex commitments from a handful of hyperscalers. Two of those three are denominated in real dollars on signed paper. The third is what you keep an eye on.
Shares of Apple (NASDAQ:AAPL | AAPL Price Prediction) are down 6% in midday trading on Thursday, sitting near $274 after closing the prior session at $293. The slide is Apple stock’s sharpest single-day move in months and stands out against its 38% one-year gain.
The trigger came straight from the C-suite. Apple announced price increases on MacBooks and iPads, and CEO Tim Cook tied the move squarely to soaring memory and storage costs driven by AI data center buildouts. Notably, Apple left iPhone pricing untouched.
The pain is not evenly spread across the supply chain. Micron Technology (NASDAQ:MU) stock is up 16% at the same time, riding the opposite side of the same memory crunch after a blowout earnings report.
Cook Calls It a “Hundred-Year Flood” The framing came straight from Apple’s chief executive. “This is a hundred-year flood. I’ve never seen anything like it in any area in over 40 years,” Cook stated, calling the price increases “unavoidable” and noting that Apple had tried to shield customers but “the situation has become unsustainable.”
The dollar impact on Apple’s hardware lineup is notable. The MacBook Neo moves from $599 to $699, the MacBook Air from $1,099 to $1,299, and the 14-inch MacBook Pro from $1,699 to $1,999 (with the 16-inch from $2,699 to $2,999). On tablets, the iPad Air 11-inch jumps from $599 to $749 and the 13-inch iPad Pro from $1,299 to $1,499.
Cook also left the door open to additional hikes on “a number of products,” and indicated Apple is willing to deploy cash reserves to help boost memory supply, though it will not build its own memory facilities. He even suggested U.S. policymakers consider easing restrictions on working with Chinese memory suppliers.
That last point is unusual for Apple. It hints at how acute the company views the supply situation, and how few near-term levers it has to pull on component cost.
Memory Buyers Squeezed, Memory Sellers Cashing In The same shortage hammering Apple is rocket fuel for Micron and its shareholders. Micron just reported fiscal Q3 2026 revenue of $41.46 billion, with GAAP gross margin of 85% versus 37.7% a year earlier, and guided fiscal Q4 revenue to $50 billion plus or minus $1 billion.
Those are the quantitative anchors for Cook’s “flood” framing. Memory suppliers like Micron are extracting pricing power from the AI capex cycle, while memory buyers like Apple are passing some of that cost straight through to consumers. The split is unusually stark in semis today, and it reframes Apple stock and Micron stock as two sides of the same trade.
Demand Elasticity Meets Margin Protection The bears are focused on demand destruction. A $100 jump on the entry-level MacBook Neo is meaningful for price-sensitive buyers, and broader tech-sector margin pressure from persistent component inflation is a live concern. Retail sentiment on Apple has tilted bearish, with a Reddit gauge showing a sentiment score of 32 on r/WallStreetBets earlier this week.
The measured view is that loyal Apple customers will absorb most of the price increases, and that leaving iPhone pricing alone protects the company’s most important revenue line. The industry context also matters here. Microsoft, other PC makers, and console builders Nintendo and Sony have already raised their prices, so Apple joins them as the latest name to capitulate.
Apple’s recent results give it some cushion to absorb a bumpy news cycle. The company’s fiscal Q2 2026 revenue came in at $111.18 billion with EPS of $2.01, and Apple’s board authorized a fresh $100 billion buyback alongside a 4% dividend bump. Apple stock also trades at a P/E ratio of 38x, leaving little room for execution slips.
What to Watch Next The near-term tell for Apple stock is whether today’s 6% drop steadies into the close or accelerates as more sell-side notes hit. Cook’s “more hikes may come” warning leaves an open question on Apple’s pricing posture into the holiday quarter, and any guidance refresh could shift the narrative quickly.
Investors can watch for early read-throughs on demand for the higher-priced Mac and iPad lineups, plus commentary from peers exposed to the same memory squeeze. With Micron having just reset expectations on memory pricing, the next earnings cycle for hardware OEMs could surface more margin commentary in the same direction.
For now, the “hundred-year flood” line is doing real work. It explains why Apple stock is among the worst performers in mega-cap tech today and why Micron stock is among the best, and it sets the tone for how investors may want to size their exposure to memory-heavy hardware names from here.
Top Wall Street analysts changed their outlook on these top names. For a complete view of all analyst rating changes, including upgrades and downgrades, please see our analyst ratings page.
Considering buying URI stock? Here’s what analysts think:
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