Micron stock jumps 10% as revenue quadruples on AI memory boom

Micron's revenue more than quadrupled in the fiscal third quarter, the company said Wednesday, propelled by soaring memory prices tied to the artificial intelligence boom. The stock climbed about 10% in extended trading.

Net income reached $28.24 billion, or $24.46 per share, up from $1.89 billion, or $1.68 per share a year earlier. Gross margin jumped to 84.9% from 74.9% in the prior period and 39% a year ago, topping analyst estimates. For the current quarter, Micron said it expects revenue of roughly $50 billion, well above the $43.58 billion analysts had forecast. A year earlier, revenue was $11.3 billion.

Memory prices have surged as AI chips consume most production capacity from a small group of vendors. Data center demand is pushing up prices for memory used in smartphones, laptops and other gadgets too. That has made Micron essential for chips made by Nvidia and Google, as well as the servers housing those processors. Nvidia, Micron's largest customer, holds an Alpha Score of 65 on AlphaScala's scale, indicating moderate momentum. Micron's stock has risen roughly 700% over the past year, lifting its market cap past $1 trillion.

The company said tight conditions for memory should persist beyond 2027, driven by AI demand. Micron has signed 16 long-term agreements with customers including data center operators and automakers, locking in sales for three to five years.

All four of Micron's business units saw revenue multiply. The core data center business posted the fastest growth, with sales climbing more than sevenfold to $11.5 billion from $1.53 billion. Cloud memory revenue jumped over 300% to $13.77 billion. Sales for devices also rose: the mobile and client unit grew over 250% to $11.52 billion, and memory for automotive and embedded applications more than quadrupled to $4.63 billion. Data center solid state drive revenue totaled over $5 billion, the company said in a presentation.

Shareholders will receive a 15-cent dividend in July.