Memory chipmaker Micron Technology Inc. crushed Wall Street’s expectations on earnings and revenue and offered jaw-dropping guidance for the current quarter, sending its stock higher in extended trading.

The company reported first-quarter earnings before certain costs such as stock compensation of $4.78 per share, easily beating the Street’s forecast of $3.95, while revenue jumped 57% from a year ago, to $13.64 billion, well ahead of the $12.84 billion estimate. With those numbers, it was hardly surprising to see Micron’s overall profit soar – it ended the quarter with net income of $5.42 billion, up from just $1.87 billion in the year-ago period.

Micron Chief Executive Sanjay Mehrotra (pictured) said on a conference call with analysts that the rapid growth in artificial intelligence data center capacity is driving a significant increase in demand for high-performance and high-capacity memory and storage. “Server unit demand has strengthened significantly,” he said, adding that he expects growth in the “high teens” this year.

That demand is unlikely to let up anytime soon, and so Micron’s guidance was uncharacteristically bullish. For the current quarter, it said it’s looking at earnings per share of around $8.42 at the midpoint, crushing the Street’s forecast of $4.78 per share. It’s also projecting revenue of $18.7 billion at the midpoint, well ahead of the $14.2 billion analyst estimate. Investors quickly made their approval known, as Micron’s stock gained more than 8% after-hours.

“Our outlook reflects substantial records across revenue, gross margin, earnings-per-share and free cash flow, and we anticipate our business performance to continue strengthening through fiscal 2026,” Mehrotra told analysts.

Micron is a manufacturer of solid-state storage drives and memory chips that have become fundamental components in everything from personal computers to smartphones and vehicles, but their most important application now is in AI servers. The company is one of just three in the world, along with Samsung Electronics Co. Ltd. and SK Hynix Inc. in South Korea, that manufacture so-called “high-bandwidth memory chips.”

HBM memory chips have become essential for AI model training and inference tasks. Micron’s customers include Nvidia Corp. and Advanced Micro Devices Inc., which need vast amounts of memory for their graphics processing units.

With the rapid data center buildouts of companies such as OpenAI Group PBC, Google LLC, Microsoft Corp., Oracle Corp. and every other major AI player, the industry is facing an acute shortage of HBM chips, which are being bought up faster than they can be manufactured. That’s why Micron’s stock has soared over the past year, and is now up more than 168% in 2025.

Mehrotra told analysts on the call that he expects the market for HBM chips to continue growing for the foreseeable future, and forecasts its value to increase from $35 billion this year to $100 billion by 2028. He added that the supply of these components is going to fall “substantially short” of demand throughout that period.

Constellation Research analyst Holger Mueller told SiliconANGLE that the AI industry boom has been especially beneficial for Micron, as its HBM memory has become the key storage medium for “AI factories,” namely the massive data centers that process large language models. “Micron blowing past expectations and raising its guidance in a record fashion is extremely impressive and shareholders are more than happy,” he said. “Micron now needs to deliver on its rosy forecast and ensure it doesn’t disappoint.”

During the quarter, Micron generated $5.2 billion in revenue from cloud memory sales, up more than 50% on an annual basis. It also reported $2.38 billion in core data center sales, up just 4% from a year earlier. Both business units benefitted from higher pricing.

The shortage of memory chips has become so acute that Micron made the decision earlier this month to stop selling products directly to consumers, meaning it will quit manufacturing devices such as external storage drives that are often used by gamers to enhance the performance of their PCs. It took the decision so it can to preserve its supply of memory chips for AI and data center customers.

Photo: SiliconANGLE