Micron Technology shares soared nearly 20% in pre-market trading on Thursday after the memory chipmaker delivered a blowout set of quarterly results, fuelled by insatiable demand for artificial intelligence memory chips and data centre infrastructure.
The stock rose as much as 20% before trimming some gains. As of 5 p.m. IST, Micron shares were trading 17.3% higher at $1,230.60.
The rally came after the company reported one of the strongest earnings performances in its history, with fiscal third-quarter revenue surging 346% year-on-year to $41.46 billion from $9.3 billion a year earlier, comfortably beating Wall Street estimates.
Adjusted earnings came in at $25.11 per share, well ahead of analysts' expectations of $20.78 per share.
Micron also issued an upbeat outlook for the current quarter, forecasting revenue of about $50 billion, compared with $11.3 billion in the corresponding period last year. The company expects adjusted earnings per share of $31, plus or minus $1, significantly above analysts' consensus estimate of $25.84.
The results underscore the strength of the AI-driven memory supercycle, with demand for DRAM and High-Bandwidth Memory (HBM) chips continuing to outstrip supply.
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Micron, the only US-based producer of HBM chips used alongside Nvidia's AI processors, has emerged as one of the biggest beneficiaries of the surge in AI infrastructure spending. Tight supply has enabled Micron, along with rivals SK Hynix and Samsung Electronics, to command premium pricing for advanced memory products.
Chief Executive Officer Sanjay Mehrotra said the supply-demand imbalance is likely to persist for years.
"We expect tight conditions to persist beyond calendar 2027 as a result of AI-driven demand across all segments coupled with structural supply constraints," Mehrotra said, adding that the company does not yet see when memory supply will catch up with demand.
Micron also announced a significant shift in its business model aimed at reducing the cyclicality traditionally associated with the memory industry.
The company has secured $22 billion in customer commitments through 16 long-term strategic agreements spanning data centre, consumer and automotive markets. These contracts include take-or-pay clauses, customer deposits and pricing floors designed to provide greater earnings visibility and protect margins.
In addition, Micron disclosed that its remaining performance obligations, a measure of contracted future revenue—have climbed to around $100 billion.
To support future growth, the company plans to continue investing aggressively in manufacturing capacity. It expects fourth-quarter capital expenditure of around $10 billion, above analysts' estimates of $8.89 billion, while also signalling plans to increase capital returns to shareholders.
The earnings report marks a sharp turnaround for a company that only a few years ago was grappling with one of the worst downturns in memory-chip history. Today, the explosive growth in AI data centres has transformed memory chips into one of the most critical components of the AI ecosystem.
Micron's shares have already surged more than threefold this year, despite a sharp 13% decline earlier this week during a broader technology sell-off.
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