People visit Micron booth during the 7th China International Import Expo (CIIE) at the National Exhibition and Convention Center (Shanghai) on November 5, 2024 in Shanghai, China.
Vcg | Visual China Group | Getty Images
Micron‘s blowout second-quarter earnings report fueled by a surge in memory demand hasn’t been a boon for the stock.
Since reporting on Wednesday, the memory maker’s stock has dipped about 15% in the days since.
Micron has benefited from the soaring demand for artificial intelligence chips, which require large amounts of memory.
Micron, SK Hynix and Samsung make up nearly the entire market for the types of memory that AI companies like Nvidia and Advanced Micro Devices depend on for their high-performance chips.
“Memory today is very tight supply and supply cannot be brought up that easily, and you are seeing that in our results,” Micron CEO Sanjay Mehrotra told CNBC’s “Squawk on the Street” on Thursday. “You are seeing the value of memory reflected in our strong financial performance in Q2.”
Mehotra added that the company has had trouble serving its customers as the supply crunch tightens, with key customers only getting “50% to two-thirds of their requirements.”
Micron is up over 300% in the past year. It’s the only tech company of the top 10 in the U.S. to see gains year-to-date, with Oracle and Microsoft both down over 20%.
Micron reported $23.86 billion in revenue for Q2 of fiscal 2026, almost triple its reported $8.05 billion from a year prior. The company also issued strong guidance, projecting gross margins of about 80% for the next quarter.
Analysts reacted positively to the company’s earnings, despite the immediate fall in the stock. Bank of America, Morgan Stanley and JPMorgan all hiked their price targets after the report.
“Higher FY27 capex and peak gross margins concerns (81% > Nvidia 75%) likely induced some profit taking after a strong stock run into the print,” wrote Citi’s Atif Malik of the fall.
Micron one-year stock chart.
