Micron (MU) delivered a stronger than expected third quarter after the bell on Wednesday, beating forecasts across profit, revenue and margins while lifting its forward outlook well above Wall Street estimates.
The reaction in after hours trading was immediate, with shares rising more than 6% as investors responded to both the earnings beat and upgraded guidance.
Revenue for the quarter came in at $41.46 billion, ahead of analyst expectations of around $35.84 billion, while adjusted earnings per share reached $25.11 compared with forecasts closer to $20.78. The scale of the improvement becomes clearer when compared with the same period last year, when revenue stood at $9.3 billion.
Net income rose sharply to $28.24 billion from $1.89 billion a year earlier, reflecting stronger pricing power and a product mix increasingly weighted towards high demand components. Profitability also strengthened further along the chain, with adjusted gross margin reaching 84.9%, ahead of expectations and well above prior periods.
Demand continues to be driven by expansion in data centre infrastructure linked to artificial intelligence. DRAM revenue reached $31.3 billion, ahead of forecasts of $27.5 billion, while NAND storage came in at $9.9 billion, also above expectations. DRAM remains central to AI server performance, particularly through high bandwidth memory used in accelerated computing systems, alongside its wider role in consumer devices.
Forward guidance reinforced the strength of current conditions. Micron expects fourth quarter revenue between $49 billion and $51 billion, significantly higher than analyst expectations of around $43 billion. That outlook suggests demand is continuing to outpace available supply across core memory categories, keeping pricing firm.
The company also expanded its position within the AI ecosystem through a strategic agreement with Anthropic, under which it will supply memory and storage chips for AI systems. The deal adds further visibility to demand as hyperscale data centre investment continues to accelerate.
The effects of tight supply have already spread beyond data centres into consumer electronics. Gaming consoles from Sony, Microsoft and Nintendo have seen price increases, while Apple has warned that rising component costs could force higher prices on some devices and weigh on margins if demand weakens.
Micron’s shares have risen more than 700% over the past year, underlining the scale of the shift in valuation across memory suppliers including SK Hynix. Despite questions around valuation after such a rapid move, the latest results point to continued strength in demand conditions rather than early signs of slowdown.
