Micron Stock Surges 16% In Premarket Trading After Blockbuster Earnings Report

Micron stocks jumped over 16% in premarket trading on Thursday on the back of a strong earnings report. This comes as the artificial intelligence boom leads to a surge in demand for memory chips.

Micron's stock was 16.89% higher at $1,225.57 at 6:27 am ET, as per Nasdaq data.

The company's blockbuster earnings report also helped drive a rally in tech stocks, reversing a selloff, CNBC reported.

Qualcomm jumped 12% in premarket trading on Thursday while Intel rose nearly 6%. Nvidia gained 1.5% and AMD rose by 3.6%.

Micron's Earnings Report

The semiconductor company's revenue in the fiscal third quarter beat analyst expectations. Micron's revenue more than quadrupled from $9.3 billion a year earlier to $41.46 billion, going past predictions of nearly $36 billion, as per LSEG consensus estimates.

Micron forecast revenue of almost $50 billion for the current quarter, a jump from  $11.3 billion in the past year.

Micron's stock has increased a whopping 723% over the past year, pushing the chip company's market cap to $1.2 trillion.

The company has profited from the AI infrastructure buildout by major hyperscalers. AI data centres require large amounts of memory chips, which has reduced the supply of chips for other devices like smartphones and PCs. The supply imbalance has led to higher memory prices and boosted Micron's results.

Micron stated on Wednesday that it had signed 16 long-term agreements with several customers, from automakers to data centres, locking in sales for a three to five year period. The chip company expects to see about $22 billion worth of financial commitments from these deals.

Micron's adjusted gross margin, or the percentage of sales remaining after deducting production costs, rose to 84.9% last quarter, beating estimations of 81.9%.

Excluding some items, Micron expects its profit in the fourth quarter to be about $31 a share, compared to a prediction of $25.31, Bloomberg reported.

Micron's earnings report came at a pivotal time for the industry, which has been going through a selloff due to investors concerns about the feasibility of an AI spending boom.

Micron's earnings report reassured Wall Street. Company CEO Sanjay Mehrotra stated on a conference call with analysts that there was “no line of sight” to when supply of memory chips will catch up with demand.

The situation would persist beyond calendar 2027, he claimed, adding that supply of memory chips may improve gradually in 2028.