Why Micron Stock Skyrocketed to a New All-Time High Today
Key Points
Micron has the chips hyperscalers need to operate their data centers.
With memory in short supply, Micron's profits are soaring.
- 10 stocks we like better than Micron Technology ›
Shares of Micron Technology (NASDAQ: MU) surged on Thursday after the memory chip leader delivered a blockbuster earnings report.
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An AI bonanza
Micron's revenue rose a staggering 346% year over year to $41.5 billion in its fiscal third quarter, which ended on May 28.
The AI boom and the massive data sets it requires are creating enormous demand for the high-performance memory chips Micron produces.
With demand outpacing supply, the chipmaker is enjoying a highly favorable pricing environment that's driving its profit margins sharply higher.
Micron's gross margin climbed to 84.6%, up from 37.7% in the prior-year quarter.
The semiconductor leader's net income, in turn, increased 15-fold to $28.2 billion, or $24.67 per share.
"Micron's record fiscal Q3 financial results and even stronger outlook for Q4 reflect the strategic value of memory in the AI era," CEO Sanjay Mehrotra said.
The good times are set to continue
Micron guided for $50 billion in revenue and $31 in adjusted earnings per share in the fourth quarter.
Yet it was management's comments regarding tight supply conditions persisting beyond calendar 2027 due to booming AI-driven demand that really got investors excited.
"We currently do not have line of sight as to when memory supply will be able to catch up with increasing demand," Mehrotra said during a conference call with analysts.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology. The Motley Fool has a disclosure policy.
