Micron Technology on Wednesday reported third-quarter results well above expectations and issued a stronger outlook for the fourth quarter, signaling that the rapid spread of generative artificial intelligence is supporting robust demand for memory chips. Following the announcement, the company’s shares rose about 18% in after-hours trading.
Results and guidance
Micron posted revenue of $41.46 billion for the third quarter, compared with analysts’ expectations of $35.85 billion. Adjusted earnings per share were $25.11 versus an expected $20.78.
For the fourth quarter, the company expects revenue of $50 billion, plus or minus $1 billion; the LSEG consensus was $43.58 billion. Micron also guided to adjusted earnings per share of $31, plus or minus $1, while the analyst consensus stood at $25.84.
Why demand is rising
Micron said demand for high-bandwidth memory — a key component in AI data centers — has jumped as generative AI deployments expand. The company, a major supplier to Nvidia’s artificial intelligence processors, has benefited as chip and server makers move to secure limited supplies.
As the only U.S.-headquartered high-end memory manufacturer, Micron faces demand for its high-bandwidth memory chips that exceeds its production capacity. Analysts expect demand to outstrip supply for the next two to three years.
Production priorities and consumer impact
Major memory suppliers are prioritizing production of high-bandwidth memories to meet AI requirements. That emphasis has made it harder for consumer electronics makers to obtain traditional memory chips and has contributed to upward price pressure on those products.
Chief Executive Officer Sanjay Mehrotra said the tight market could persist beyond 2027 because AI-driven demand is present across segments while structural constraints limit supply.
Investments and shareholder returns
Micron plans to increase shareholder payouts while investing heavily in factory and infrastructure expansion to serve rising demand. The company expects roughly $10 billion in capital expenditures for the fourth quarter, above analysts’ projected $8.89 billion.
Market reaction
After the results, Micron’s stock jumped about 18% in after-hours trading, putting the share price near $1,237 heading into the next session.
Source: Reuters
This article does not constitute investment advice or a recommendation.
