Micron stock pops 14% as AI memory demand soars: 'We are more than sold out'

Micron Technology's shares surged by 14% following the company's announcement of strong demand for its memory chips, significantly exceeding fiscal first-quarter projections. In a recent earnings call, Micron, a key player in memory storage technology for computers and AI servers, revealed that increased requirements from data centers have driven heightened demand for its products. The company anticipates that the market for high-bandwidth memory could reach $100 billion by 2028, growing at an impressive compounded annual growth rate of 40%. Additionally, Micron raised its capital expenditures forecast from $18 billion to $20 billion. "We are more than sold out," stated Sumit Sadana, the business chief, highlighting that there remains a substantial unmet demand within their projections. This trend aligns with a market environment where demand is expected to consistently outpace supply in the near future. Micron not only surpassed Wall Street's fiscal first-quarter estimates but also offered a bullish outlook. The company reported adjusted earnings of $4.78 per share on revenues of $13.64 billion, exceeding LSEG's forecasts of $3.95 per share in earnings and $12.84 billion in revenue. For the upcoming quarter, Micron expects revenues to reach approximately $18.70 billion, significantly higher than the $14.20 billion anticipated by LSEG. Predictions for adjusted earnings are set at $8.42 per share, compared to expectations of $4.78. Following these results, JPMorgan raised its price target on Micron's stock, citing a favorable pricing environment, while Bank of America upgraded the shares to a buy recommendation. Morgan Stanley referred to these results as representing the best revenue and net income growth in the "history of the U.S. semiconductors industry," outside of Nvidia. Analysts noted that if AI continues its upward trajectory, the next year could see broader benefits for the AI sector beyond just processors, with memory being a major winner.