Micron Technology (MU) shares jumped early Thursday as the semiconductor manufacturer provided a fiscal fourth-quarter outlook above Wall Street's estimates and reported stronger-than-expected results for the prior three-month period.
The company anticipates adjusted earnings of $31 a share, plus or minus $1, for the ongoing quarter, it said late Wednesday. Revenue is pegged at $50 billion, plus or minus $1 billion. The current consensus on FactSet is for non-GAAP EPS of $28.47 and sales of $47.56 billion.
The stock rose 16% in the most recent premarket activity.
Micron expects supply and demand conditions for dynamic random-access memory, or DRAM, and NAND flash memory demand to "remain tight" beyond next year, Chief Executive Sanjay Mehrotra said in prepared remarks. The company projects DRAM bit shipments to grow in the low- to mid-20% range for 2026, and NAND bit shipments to rise by about 20%, according to Mehrotra.
"Even as we expect industry supply to improve gradually in 2028, we currently do not have line of sight as to when memory supply will be able to catch up with increasing demand," Mehrotra said. "We expect Micron DRAM supply to grow approximately in line with the industry supply growth, while Micron NAND supply grows somewhat less than the industry supply growth in calendar 2026."
The chipmaker forecasts capital expenditures of around $10 billion in the fourth quarter, taking its full-year capital spending to roughly $27 billion, according to Chief Financial Officer Mark Murphy. For fiscal 2027, it expects quarterly capital expenditures to be above levels in the ongoing quarter, with more than half of the year-over-year increase to come from construction spending, as "we pull in cleanroom capacity required to address long-term demand," Murphy said.
For the third quarter ended May 28, Micron reported adjusted EPS of $25.11, up from $1.91 the year before, and topping the Street's view for $20.86. Revenue soared to $41.46 billion from $9.3 billion, surpassing the average analyst estimate of $35.91 billion.
Revenue from the cloud memory business unit amounted to $13.77 billion, up from $3.39 billion in the prior-year quarter. The core data center and mobile and client segments logged revenue of $11.52 billion each, up from $1.53 billion and $3.26 billion, respectively. The automotive and embedded division sales inclined to $4.63 billion from $1.13 billion.
The results show "the memory and chip trade is well-intact and still in the early stages of playing out with the (artificial intelligence) revolution still in the 3rd inning," Wedbush Securities said in a client note. "We are seeing no cracks in AI demand on the chips/hardware or software front which gives us a bright green light to own the core tech winners into year-end."
The brokerage has an outperform rating on Micron's stock with a price target of $1,300.
