Micron stock pops on earnings blowout as AI memory demand soars

Micron TechnologyThe company’s shares rose 13% after the company signaled strong demand for memory chips and boomed first quarter of fiscal year predictions.

Micron, which produces memory storage for computers and artificial intelligence servers, said in an earnings call with analysts that demand for its products for data center needs is increasing.

Micron said it expects the total addressable market for high-bandwidth memory to reach $100 billion by 2028, growing at a compound annual growth rate of 40%. Management also increased its capital spending guidance from $18 billion to $20 billion.

“We’re more than sold out,” said chief operating officer Sumit Sadana. “There is significant unmet demand in our models, and this is consistent with an environment where demand is significantly higher than supply for the foreseeable future.

Micron beat Wall Street estimates for its fiscal first quarter and released a big forecast.

The company reported adjusted earnings of $4.78 per share on revenue of $13.64 billion, beating LSEG’s estimates of $3.95 earnings per share and sales of $12.84 billion.

Revenues for the quarter are expected to reach approximately $18.70 billion, exceeding the $14.20 billion that LSEG had expected. Adjusted earnings are estimated to reach $8.42 per share, versus expectations of $4.78.

JPMorgan raised its stock price target following the results, citing a favorable pricing pattern, while Bank of America upgraded the shares to a buy rating.

Morgan Stanley called the results the best revenue and net income growth “in the history of the U.S. semis industry” other than Nvidia.

“If AI continues to grow as we expect, we believe the next 12 months will drive more AI trading than just processor names and memory,” analysts wrote.

WRISTWATCH: Micron shares soar on better-than-expected quarterly results