Memory chipmaker Micron Technology Inc. reported strong fourth-quarter earnings and revenue today and followed with guidance that came in well ahead of expectations, sending its stock higher in extended trading.

The company reported earnings before certain costs such as stock compensation of $3.03 per share, cruising past Wall Street’s target of $2.86 per share, and up from just $1.18 in the year-ago period. Revenue for the quarter hit $11.3 billion, up 46% from a year ago and edging past the analyst consensus estimate of $11.2 billion.

Last month, Micron took the unusual step of increasing its fourth-quarter earnings and revenue guidance – something that’s rarely done by publicly traded companies halfway through the quarter. Today’s results exceeded those recently raised expectations. The strong numbers helped Micron’s bottom line surge, with net income rising to $3.2 billion, up from just $887 million in the year-ago period.

Micron also offered solid guidance for the current quarter. It said it’s expecting fiscal 2026 first quarter sales of around $12.5 billion at the midpoint of its range, above the Street’s target of $11.9 billion. And it sees earnings of between $3.60 and $3.90 per share, far in excess of the analyst’s $3.05 target.

Micron’s stock rose just over 1% after-hours, adding to momentum that has seen it almost double in value in the year to date. The company is a supplier of memory and storage chips, selling these vital components to both server and personal computer makers. The company has emerged as one of the big winners of the artificial intelligence boom thanks to soaring sales of its high-bandwidth memory chips, which are essential for AI servers powered by graphics processing units.

On a conference call with analysts, Micron Chief Executive Sanjay Mehrotra (pictured) said the company enjoys a unique position as the only U.S.-based manufacturer of HBM chips, which gives it a golden opportunity to capitalize on future AI growth.

The company’s cloud memory business unit, which accounts for AI memory chip sales, delivered $4.54 billion in sales during the quarter, more than tripling year-over-year. The mobile and client business unit added an additional $3.76 billion in sales, up 18%, while the automotive and embedded business rose 16%, to $1.43 billion. The only disappointment was Micron’s core data center unit, where sales declined 22% from a year earlier to $1.57 billion.

“We have strong momentum entering fiscal 2026, with a robust fiscal Q1 demand outlook led by data center, and the most competitive position in our history,” Mehrotra told analysts. “Over the coming years, we expect trillions of dollars to be invested in AI, and a significant portion will be spent on memory.”

In response to a question from an analyst during the call, Mehrotra said the supply of dynamic random-access memory remains very tight thanks to the increased demand from the AI sector. He also reiterated that the company’s next generation HBM4 memory chips are still on track to support customers gearing up their chip platforms, even though the bandwidth and performance requirements of many have increased.

According to Mehrotra, the company recently shipped its first samples of HBM4 to customers, adding that they boast an industry-leading bandwidth of 2.8 terabytes per second, with “pin speeds” exceeding 11 gigabits per second, referring to the data transfer rates that each pin on the memory module can achieve. The executive conceded that the specifications of HBM chips are becoming “more demanding,” but said the company believes it’s in a good position with its next generation of products, and expects that its value proposition will continue to grow.

Micron is in somewhat uncharted territory as the AI boom upends traditional expectations for chipmakers. Typically, the business was characterized by dramatic swings in market demand, inventories and pricing, resulting in cyclical fluctuations in revenue and earnings growth.

However, investors hope that the insatiable demand for memory chips from companies building AI data centers will offset any weaknesses elsewhere in Micron’s other segments, such as chips for consumer devices. It has been growing solidly for the last two years, which is already longer than most cycles, but investors would be very disappointed if it suddenly came to a halt now, and they expect it to continue growing for some time yet.

In a note to clients, TD Cowen analyst Krish Sankar said he expects memory chip prices to grow over the next three to four quarters. Ordinarily, this deep into an up cycle, inventories would become inflated, causing prices to drop and a downward cycle to begin, he said. But he doesn’t believe that will happen yet.

“We think Micron stock will continue its outperformance in the short term as checks continue to support that momentum,” Sankar said.

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