Micron Technology delivered a blowout fiscal third-quarter report, with revenue surging to $41.456 billion, up 346% from a year earlier and well above expectations of $35.4 billion. Net income reached $28.243 billion, nearly 15 times higher year over year, while adjusted earnings per share came in at $25.11.
Shares jumped 16% in after-hours trading following the release, sparking gains across global semiconductor stocks and briefly halting trading in South Korea due to volatility.
Strong outlook fueled by AI demand
The company projected fourth-quarter revenue of around $50 billion, comfortably ahead of forecasts of $42.9 billion. Gross margins are المتوقع to reach roughly 86%, with earnings per share near $31.
Demand tied to artificial intelligence continued to drive growth across all business segments. Cloud memory revenue climbed more than 300% to $13.77 billion, while data center sales surged 600% to $11.52 billion. Data center SSD revenue exceeded $5 billion, and mobile, automotive, and embedded segments all posted gains above 250%, with margins across divisions topping 80%.
Supply constraints expected to persist
Micron said its high-bandwidth memory capacity for 2026 is fully sold out, with demand extending into future generations. The company has begun volume shipments of its HBM4 product and plans mass production of HBM4E in 2027.
Management signaled that tight supply conditions in both DRAM and NAND markets could last beyond 2027, reflecting sustained infrastructure buildout tied to AI computing.
Chief executive Sanjay Mehrotra indicated the company can currently meet only about half to two-thirds of customer demand, underscoring a structural supply shortfall.
Long-term contracts reshape industry dynamics
To secure future revenue, Micron has signed 16 agreements spanning data center, consumer, and automotive sectors through 2030. These deals account for roughly 20% of DRAM and one-third of NAND shipments and include take-or-pay terms that require buyers to honor purchase commitments.
The agreements are expected to guarantee about $100 billion in baseline revenue, supported by $22 billion in customer deposits, including $18 billion in cash. This marks a shift toward order-driven production planning rather than reliance on cyclical demand forecasts.
Capital spending rises alongside secured demand
Fourth-quarter capital expenditure is projected at $10 billion, above earlier estimates, bringing full-year 2026 spending to around $27 billion. Further increases are expected in 2027, focused on advanced DRAM, HBM, and packaging capacity.
Unlike previous cycles, these investments are tied to confirmed orders, reducing the risk of oversupply that historically led to price collapses.
Ripple effects across crypto and computing markets
The tightening supply of high-performance memory has broader implications for computationally intensive industries, including cryptocurrency networks that rely on large-scale hardware deployment. Rising costs for components such as memory and graphics processors are increasing operational pressure on these systems.
Market behavior is already shifting. The 30-day correlation between Bitcoin and a major semiconductor ETF has dropped from 0.55 to 0.27 this year, suggesting traders are favoring chipmakers with strong earnings visibility over assets tied to computational demand.
The report reinforces a broader trend: AI-driven infrastructure demand continues to expand rapidly, with no clear peak in sight, while supply remains constrained and increasingly locked in through long-term agreements.
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