Micron Technology shares jumped almost 16% within the first hour of trading on Thursday. The surge came after the company shared very strong results and an even stronger outlook.
The memory chipmaker said revenue, profits, and margins are set to rise sharply in the current quarter. It also expects margins to reach the highest level in its history. Rising memory prices and heavy demand from AI related work played a big role in this performance.
Morgan Stanley analyst Joseph Moore said the results were extraordinary. He called it one of the biggest revenue and profit surprises the US semiconductor industry has ever seen, outside of Nvidia.
For the quarter that ended on Nov. 27, Micron reported earnings of $4.78 per share. This was well above the market expectation of $3.94.
Revenue came in at $13.64 billion. A year ago, the company had reported $8.71 billion. Analysts were expecting around $12.83 billion, so Micron clearly beat forecasts.
The company has benefited from a strong recovery in traditional DRAM memory prices. Demand for faster and more advanced memory used in AI systems has also climbed rapidly.
Looking ahead, Micron gave a very bullish forecast for the second quarter of fiscal 2026. It expects revenue of about $18.7 billion, with some flexibility on either side. Wall Street was only expecting $14.23 billion.
The company also forecast earnings of $8.42 per share at the midpoint. This is nearly double the market estimate of $4.49.
Micron said its gross margin could reach 68% in the coming quarter. This would be an all time high. It would also be a sharp jump from the previous quarter.
Industry checks suggest that DRAM prices are rising at a double digit pace each quarter. Buyers are increasingly worried about limited supply stretching into 2026. This is helping Micron raise prices and improve profits.
CEO Sanjay Mehrotra said the company delivered record revenue in the first fiscal quarter. He added that margins expanded significantly across every business unit.
Mizuho analyst Vijay Rakesh also reacted positively to the results. He described Micron’s guidance for the February quarter as massive. He said the company is set for continued revenue and earnings growth thanks to strong pricing in high bandwidth memory and advanced DRAM. He raised his price target on the stock to $290 from $270.
Micron said it expects performance to keep improving through fiscal 2026. The company is investing heavily to meet rising demand for memory and storage used in AI systems.
Demand for high bandwidth memory and advanced NAND chips has strengthened. This has boosted pricing power, margins, and cash generation.
Operating cash flow rose to $8.41 billion. This was up from $5.73 billion in the previous quarter and $3.24 billion a year earlier. Free cash flow also hit a record high.
