Micron's Record Quarterly Revenue Supports Investors' 'Super Bullish' Outlook

Micron Technology Inc. reported stronger-than-expected earnings for its fiscal third quarter, as soaring demand for artificial intelligence (AI) infrastructure continues to drive growth in its memory chip business. The company delivered record-setting revenue and beat Wall Street’s projections across key metrics, buoyed in large part by increased sales of its high-bandwidth memory (HBM) chips used in AI applications.

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For the quarter ended in May, Micron posted revenue of $9.3 billion, marking a 37% increase compared to the same period last year. This figure exceeded analyst forecasts, which had anticipated $8.9 billion, according to FactSet. Adjusted earnings per share came in at $1.91, significantly surpassing consensus estimates of $1.60.

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Micron CEO Sanjay Mehrotra highlighted the company’s strong financial performance and its positioning to capitalize on the ongoing AI-driven technology wave. “We are on track to achieve record revenue with healthy profitability and free cash flow for fiscal 2025,” Mehrotra said. “We are making strategic investments in innovation and production capacity to maintain our leadership in memory technology and meet accelerating AI demand.”

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The company attributed much of its revenue growth to record-setting sales of dynamic random-access memory (DRAM) chips. Within this category, high-bandwidth memory — a crucial component in powering AI workloads — saw revenue grow by nearly 50% sequentially. Micron is considered one of the top players in the HBM space, and the explosive growth in AI models has fueled demand for these advanced memory solutions.

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Revenue from Micron’s data center business more than doubled from a year ago, as cloud providers and AI-focused companies ramp up spending on memory-intensive infrastructure. Meanwhile, consumer-oriented segments also showed solid sequential growth, adding further momentum to the company’s overall performance.

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Micron reported an adjusted gross margin of 39% for the third quarter, exceeding expectations. For the current quarter, the company forecasts gross margins will rise to 42%, with a margin of error of plus or minus 1%. This beat sell-side projections that had forecasted 36.7% for the third quarter and 39% for the upcoming quarter.

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Mizuho Securities analyst Jordan Klein had noted earlier this month that investors would be paying close attention to any upward revisions in Micron’s gross margin outlook. Klein emphasized that modest beats on both past and future margins would be necessary for the stock to maintain its recent momentum. By exceeding those expectations, Micron has reinforced investor confidence in its profitability trajectory.

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Micron’s stock has been one of the best performers in the S&P 500 this month, benefiting from broader enthusiasm around AI-related hardware stocks. Klein mentioned that market sentiment remains “super bullish” on Micron as well as on peers in the memory-chip and hard-disk-drive segments. Following the earnings release, Micron’s shares rose about 1% in after-hours trading on Wednesday, signaling continued investor optimism.

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Looking ahead, the company issued robust guidance for its fiscal fourth quarter. Micron expects revenue to come in around $10.7 billion, give or take $300 million. It also anticipates adjusted earnings of $2.50 per share, with a possible variance of 15 cents. If achieved, these figures would mark another strong quarter and further evidence that Micron is riding a wave of sustained demand from the AI and data center sectors.

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The AI boom has created a massive surge in demand for advanced memory chips like HBM, which are essential for processing large datasets and training complex AI models. As major tech firms such as Nvidia, Microsoft, and Alphabet continue to build out their AI infrastructure, suppliers like Micron are poised to benefit from the sustained investment.

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In addition to its strong financial performance, Micron is also focusing on long-term strategic goals. The company is continuing to allocate resources toward expanding its manufacturing capabilities and developing next-generation memory technologies. These efforts are intended to ensure it remains competitive in a rapidly evolving market and capable of meeting rising global demand.

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Mehrotra emphasized that Micron's disciplined approach to capital spending and innovation will enable it to generate healthy returns while maintaining its leadership in a high-growth industry. “We are executing with focus and precision to seize the immense opportunity AI presents to our business,” he said.

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With record quarterly revenue, rising profitability, and bullish forward guidance, Micron appears to be in a strong position as it heads into the final stretch of its fiscal year. As long as the AI investment cycle remains intact, the company could continue delivering impressive results.

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