Micron Technology (MU) blew past Wall Street's expectations with its latest quarterly figures, and investors wasted no time reacting. In after-market trading the stock vaulted to a fresh all-time high of $1,242, and the rally carried into the pre-market session, where MU was up 18.45%, a jump of 193.49 points.
Earnings Sail Past Forecasts
Micron's revenue more than quadrupled year-over-year to $41.46 billion, with earnings per share (EPS) of $25.11 and net income of $28.86 billion. Those numbers came in well above the $36.28 billion in revenue and $21.05 EPS that analysts had penciled in.
Profitability widened sharply as well, with margins climbing to 84.6% from 74.4%, compared with 37.7% a year ago. The company expects to keep that momentum going into the next quarter as it ramps up production.
A Bigger Promise for Shareholders
According to the official release, supply-demand conditions for both DRAM and NAND will stay tight beyond calendar 2027, meaning shortages are likely to persist. The release also stated, "Over time, we expect to return 100% of our excess cash to shareholders."
Micron CEO Sanjay Mehrotra said, "Micron's record fiscal Q3 financial results and even stronger outlook for Q4 reflect the strategic value of memory in the AI era." He also highlighted that the company is investing at record levels in technology, products and supply.
Risks You Should Know
While Micron has posted massive growth over the last several months, there are risks investors should keep in mind. For one, the AI-driven stock sector could run into trouble as Wall Street's bullish predictions keep stretching higher. Some observers even warn that the market may be in an AI bubble.
The absence of a finalized peace deal between the US and Iran could also create problems. Oil prices could spike and inflation could pick up. The Federal Reserve is expected to raise interest rates twice this year, and a rate hike could push investors to move their money into safe havens like gold. Under those conditions, Micron's stock price could come under pressure.
