Micron posts record results as AI boom drives 15-fold jump in net profit

The US chipmaker Micron Technology has reported quarterly revenue and profit far above Wall Street's expectations, as insatiable demand for the memory chips that power AI transformed the firm's fortunes. Micron, one of only a handful of companies able to make advanced memory chips at scale, said on Wednesday that revenue in the third quarter reached $41.4 billion (€36.5bn), more than four times the $9.3 billion (€8.2bn) it recorded in the same period last year. The figure also comfortably beat the roughly $35.7 billion (€31.4bn) analysts had forecast, while profit climbed even more dramatically. The Idaho-based group posted net income of $28.24 billion (€24.9bn), or $24.67 per share, against less than $2 billion (€1.7bn) a year ago. Adjusted earnings of $25.11 a share sailed past the $20.49 expected. The market reaction to the impressive results was immediate. Micron shares rose more than 15% in after-hours trading to around $1,213, leaving the company valued at roughly $1.16 trillion (€1tn). The stock has now climbed about 700% over the past year, one of the most dramatic re-ratings of any large company through the AI boom, reflecting a fundamental shift in the economics of the AI build-out. The vast data centres being constructed by hyperscalers such as Amazon, Microsoft, Google and Meta, which have collectively earmarked hundreds of billions of dollars in capital spending this year, depend on enormous quantities of high-bandwidth memory, a specialised chip that sits alongside the processors made by Nvidia and others. Micron has said its entire 2026 output of these chips is already sold out under fixed-price contracts. According to CEO Sanjay Mehrotra, the results reflect what he called the strategic value of memory in the AI era. The company pointed to a series of multi-year customer agreements that it expects to make earnings more durable and predictable, a notable claim in an industry long defined by brutal boom-and-bust cycles. Margins to rival the biggest names What has startled analysts most is Micron's profitability. The company reported a gross margin of around 85% for the quarter, a level that now rivals or exceeds those of far larger technology names such as Nvidia and Meta, an extraordinary position for a memory maker historically squeezed by volatile chip prices. The tightness of supply, with new factories not expected to add meaningful output until 2028, has handed producers exceptional pricing power. Micron's guidance was more striking still. The company expects revenue of around $50 billion (€44bn) in the current quarter and adjusted earnings of roughly $31 a share, implying the boom is accelerating rather than fading. It is ramping up investment to match, lifting planned capital spending to about $27 billion (€23.7bn) this fiscal year and signalling a further jump in 2027, management told analysts during the earnings call. The results offer reassurance to investors betting that AI infrastructure spending remains robust, with Micron's order book serving as a real-time gauge of that demand. The open question, as ever in the memory industry, is how long the upswing can last before supply catches up. Even the most bullish observers acknowledge that risk has not completely disappeared.