You are currently viewing Micron Shares Jump 9% on Strong Profit Forecast Driven by AI Memory Demand

Micron Shares Jump 9% on Strong Profit Forecast Driven by AI Memory Demand

Prime Highlights

  • Micron Technology shares surged about 9% in premarket trading after the company issued a profit forecast nearly double Wall Street expectations.
  • The strong outlook highlights Micron’s growing strength in high-bandwidth memory chips, which are in high demand for AI data centres.

Key Facts

  • Micron is one of only three major global suppliers of high-bandwidth memory chips, alongside Samsung and SK Hynix.
  • The company raised its planned capital spending for 2026 to $20 billion as it prioritises AI-driven demand and enterprise customers.

Background

Shares of Micron Technology rose about 9% in premarket trading on Thursday after the U.S. chipmaker issued a much stronger-than-expected profit forecast, highlighting its growing strength in the high-bandwidth memory market used for artificial intelligence.

Micron said it expects second-quarter adjusted profit to be nearly double Wall Street estimates. The forecast reflects a global shortage of memory chips at a time when demand from AI data centres continues to surge. Micron’s shares have already gained around 168% so far this year.

The company is one of only three major suppliers of high-bandwidth memory chips, along with Samsung and South Korea’s SK Hynix. These chips play a critical role in training and running generative AI models, making them highly sought after by technology firms.

During a conference call with analysts, Micron Chief Executive Officer Sanjay Mehrotra said he expects tight supply conditions in the memory market to continue beyond 2026. He added that in the medium term, the company may only be able to meet between half and two-thirds of demand from several key customers. Micron did not disclose which customers may face supply limits.

Analysts at J.P. Morgan said Micron faces a difficult task in balancing production capacity. They noted the company must focus on higher-value AI-related products while still supplying key customers with lower-margin memory chips.

Shares of other chipmakers also rose in premarket trading, with AMD and Nvidia each gaining nearly 1%.

Micron has been adjusting its manufacturing strategy to prioritise AI-driven demand. Earlier this month, the company said it will shut down its direct-to-consumer memory business under the Crucial brand to focus more on enterprise and AI customers.

Micron also raised its planned capital spending for 2026 to $20 billion. Analysts expect any new production capacity to be quickly taken up by customers.