Key Points
- Micron’s stock jumped 7% after it forecast profits nearly double Wall Street’s expectations.
- The boom is driven by a shortage of memory chips and soaring demand from AI data centers.
- Micron is one of only three major suppliers of the high-end HBM chips needed for AI. Demand is so high that Micron can’t meet it all.
- The company is increasing its capital spending to $20 billion to ramp up production for the AI sector.
Micron Technology’s stock jumped on Wednesday after the company predicted a massive profit for the next quarter, nearly doubling what Wall Street was expecting. The rosy forecast is driven by soaring memory chip prices, which are in short supply due to explosive demand from artificial intelligence data centers.
Shares of the Boise, Idaho-based company rose 7% in after-hours trading. Micron said it expects an adjusted profit of $8.42 per share, blowing past analyst estimates of $4.78.
Micron is one of only three major companies worldwide that manufacture high-bandwidth memory (HBM) chips essential for training and running generative AI models.
The demand for these chips is so intense that Micron’s CEO, Sanjay Mehrotra, expects the market to remain tight beyond 2026. The company can’t keep up with orders and expects to meet only about half to two-thirds of demand from some of its key customers.
“I don’t know of any customer that is getting 100% of what they want from us,” said Sumit Sadana, Micron’s chief business officer.
To capitalize on the AI boom, Micron is increasing its spending on new facilities to $20 billion in 2026. The company is also strategically shifting its production to focus on the high-demand AI sector. Earlier this month, it even announced it would stop selling memory chips directly to consumers under its “Crucial” brand to free up more supply for its data center clients.
