Micron (MU) Stock Soars After Doubling Earnings Forecast

TLDR

• Micron projects Q2 earnings of $8.42 per share versus analyst estimates of $4.78
• Stock surged nearly 10% in premarket trading on the forecast
• Memory chip shortage expected to continue past 2026
• Q2 revenue guidance of $18.70 billion beats estimates of $14.20 billion by over 30%
• Company raising 2026 spending to $20 billion to expand production capacity

Micron Technology dropped a bombshell forecast that sent its stock soaring. The chip maker expects second-quarter earnings of $8.42 per share. Wall Street was looking for $4.78.

Shares jumped almost 10% in premarket trading Thursday. The stock has climbed 168% year-to-date.

The massive beat comes down to supply and demand. Memory chip prices are rising fast. AI data centers need more chips than Micron can produce.

Micron Technology, Inc., MU

Micron is one of three companies worldwide making high-bandwidth memory chips. These specialized components power AI training and deployment. SK Hynix and Samsung Electronics are the only other suppliers.

Supply Crunch Getting Worse

CEO Sanjay Mehrotra said memory markets will stay tight beyond 2026. The company expects to meet only half to two-thirds of demand from several key customers.

Chief Business Officer Sumit Sadana was blunt about the situation. Not a single customer is getting 100% of their chip orders filled. Many are receiving far less than they need.

Micron is prioritizing AI-related orders. This strategy boosts margins across the board, even for non-AI products.

The fiscal first quarter results also crushed expectations. Revenue hit $13.64 billion against estimates of $12.85 billion. Adjusted earnings came in at $4.78 per share versus the $3.95 consensus.

Revenue jumped 57% year-over-year. Net income reached $5.24 billion compared to $1.87 billion in the same quarter last year.

Massive Investment Plans

Micron raised its 2026 capital spending target to $20 billion from $18 billion. The extra cash will go toward retooling facilities for AI data center production.

The company recently announced it’s shutting down its consumer “Crucial” brand. Direct-to-consumer memory chip sales are ending entirely.

Cloud memory sales doubled to $5.28 billion. Core data center sales reached $2.38 billion, up 4% from last year. Higher pricing drove both segments.

Server demand has grown in the high teens during 2025, according to Mehrotra. This growth creates huge demand for high-performance memory and storage.

Micron is signing multiyear contracts with major customers. These deals help the company allocate limited capacity.

For the current quarter, revenue guidance came in at $18.70 billion. Analysts had modeled $14.20 billion. The $4.50 billion gap represents a 32% miss on Wall Street’s part.

The adjusted earnings guidance of $8.42 per share is 76% higher than the $4.78 consensus estimate.

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