(Bloomberg/Dina Bass) — Shares of Micron Technology Inc., the largest US maker of computer memory chips, rose by the most in eight months after the company gave an upbeat forecast for the current quarter, signaling that surging demand and supply shortages are allowing the company to charge more for products.
Fiscal second-quarter revenue will be $18.3 billion to $19.1 billion, the company said in a statement Wednesday. Analysts had estimated $14.4 billion on average for the period. Excluding some items, profit will be $8.22 to $8.62 a share, compared with a projection of $4.71.
Micron shares jumped as much as 17% after markets opened in New York on Thursday, their biggest intraday gain since April 9. The stock was already up 168% this year, closing at $225.52 on Wednesday.
Micron is positioned as “an essential AI enabler,” Chief Executive Officer Sanjay Mehrotra said in the statement. “And we are investing to support our customers’ growing need for memory and storage.”
The voracious appetite for AI computing components is outstripping supply, benefiting companies like Micron. But there also have been shortages of the less sophisticated memory used in personal computers. That stems in part from the memory industry shifting production to more advanced technology for AI data centers.
“This is the most significant disconnect between demand and supply in terms of magnitude as well as time horizon that we’ve experienced in my 25 years in the industry,” Executive Vice President of Operations Manish Bhatia said in an interview.
PC makers such as Dell Technologies Inc. and HP Inc. have warned investors that they expect memory-chip shortages in the coming year — bringing higher component prices. That’s given Micron more of an upper hand with customers in a frequently volatile industry.
“Memory price increases are unlikely to abate near term,” Bloomberg Intelligence analyst Jake Silverman said in a report.
Investors’ warm reaction to the Micron report set the company apart from Broadcom Inc. and Oracle Corp., which jarred shareholders with their results last week. Concerns about shaky AI spending continued to weigh on those stocks in recent days, and investors were looking to Micron to offer a more reassuring story about AI growth — something it largely pulled off.
Boise, Idaho-based Micron has been a key beneficiary of AI demand because its high-bandwidth memory, or HBM, is critical to the chips and systems that develop artificial intelligence models. Micron is already sold out of these components for 2026, Bhatia said.
In the fiscal first quarter, which ended Nov. 27, sales rose 57% to $13.6 billion. Profit, excluding some items, was $4.78 a share. Analysts had estimated revenue of $13 billion and earnings of $3.95 a share.
On a conference call with analysts, Mehrotra said that memory shortages will last for a while.
“Sustained and strong industry demand, along with supply constraints, are contributing to tight market conditions,” he said. “We expect these conditions to persist beyond calendar 2026.”
The CEO said he was disappointed that he couldn’t fill all the orders. “We are only able to meet about 50% to two-thirds of our demand from several key customers,” he said. “So we remain extremely focused on trying to increase the supply here and making the necessary investments.”
Those efforts include stepping up expenditures. The company now expects to devote $20 billion to capital spending this fiscal year, up from a previous forecast of $18 billion. The company spent $13.8 billion on new plants and equipment in fiscal 2025.
A new Micron plant in Boise will be manufacturing products earlier in 2027 than the company previously forecast. A second plant there, which Micron announced earlier this year, will begin construction in 2026 and be operational in 2028. The company will also break ground next year on its first plant in New York state and aims to begin supplying products from that facility in 2030.
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