Micron Technology became one of the biggest winners of the artificial intelligence boom on Thursday, as its stock surged after the company delivered strong earnings. This pushed Micron‘s market value above Meta Platforms and, for a short time, close to Tesla‘s valuation. At 10:34 a.m. ET, Micron shares were up 10.7%, adding more than $112 billion in market value in a single trading session.
Micron reported strong earnings
The sharp rise came after Micron reported quarterly results that easily beat Wall Street expectations and issued a stronger-than-expected outlook for the current quarter.
Revenue was up dramatically from $9.3 billion in the same period last year, showing how rapidly demand for AI-related memory products has grown. For the current quarter, Micron expects revenue of around $50 billion. Analysts had been expecting about $43.58 billion.
The company said fiscal third-quarter revenue jumped to $41.46 billion, far above analyst estimates of $35.84 billion. Adjusted earnings per share came in at $25.11, compared with expectations of $20.78.
AI demand continues to drive growth
Micron has emerged as a major beneficiary of the AI boom because its memory chips are used in AI systems built by companies such as Nvidia and Google.
Demand for AI infrastructure has increased so quickly that memory supplies have become tight across the industry. As a result, memory prices have risen sharply, helping boost Micron’s sales and profits.
“Our customers are recognising that supply shortages in memory and storage will take considerable time to improve, even as we expect industry supply to improve gradually in 2028,” Micron CEO Sanjay Mehrotra said on a call with analysts.
The company said cloud-memory revenue more than quadrupled to $13.77 billion, while sales from its core data-center business jumped more than sevenfold to $11.5 billion.
Micron also generated more than $5 billion in revenue from data-center solid-state drives, according to company figures.
Customers lock in $22 billion worth of purchases
Micron revealed that customers have committed about $22 billion to secure future supplies of its memory chips. The company has signed 16 long-term agreements with customers, including data-center operators and automakers. These contracts run for three to five years and guarantee future purchases.
“When completed, we expect approximately half or more of our company revenue to be under these” strategic customer agreements, Mehrotra said.
He added that the deals include binding commitments from customers to buy specific volumes of Micron products. “This is good for Micron,” CFO Mark Murphy told analysts. “We get visibility on our demand, it’s committed volume that we can be confident about making our investments.”
Profitability reaches new highs
Micron’s profitability also improved during the quarter. The company’s gross margin rose to 84.9%, up from 74.9% in the previous quarter and 39% a year ago. The figure was also higher than analysts had expected.
Net income surged to $28.24 billion, or $24.46 per share, compared with $1.89 billion, or $1.68 per share, in the same quarter last year. Growth was strong across all of Micron’s business divisions. Revenue from its mobile and client business climbed 250% to $11.52 billion, while automotive and embedded-product revenue more than quadrupled to $4.63 billion.
Micron crossed the $1 trillion market-value mark in May, joining a select group of technology giants benefiting from massive AI spending by cloud companies and other large customers. As reported by CNBC, the company’s stock has risen roughly 700% over the past year as investors continue to bet on growing demand for AI infrastructure. Micron also announced that shareholders will receive a dividend of 15 cents per share in July.
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