Micron Technology (MU) shares are surging 13% in Thursday morning trading, following a Fiscal first-quarter earnings report that has effectively reignited the AI trade. The memory chip giant delivered a performance so dominant that Morgan Stanley (MS) analyst Joseph Moore labeled it “likely the best revenue/net income upside in the history of the U.S. semis industry,” second only to Nvidia’s (NVDA) legendary May 2023 pivot.
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The breakout was fueled by an insatiable demand for High-Bandwidth Memory (HBM), the specialized chips critical for powering AI data centers. Micron reported a record revenue of $13.6 billion, surpassing the $13 billion consensus, while adjusted earnings of $4.78 per share blew past the $3.96 forecast.
The High-Bandwidth Gold Rush Secures 2026 Supply
The report effectively validates that the AI infrastructure buildout is accelerating rather than cooling. Micron management confirmed that the company’s entire HBM supply for calendar 2026 is already sold out under fixed price and volume agreements.
CEO Sanjay Mehrotra has aggressively pulled forward the industry’s growth timeline, now forecasting that the HBM market will skyrocket to $100 billion by 2028, reaching that milestone two years earlier than previous projections. This rapid expansion is driven by what Micron describes as a “pervasive step-up in demand” from well-capitalized hyperscalers who are locked into multi-year data center expansion plans.
An $18.7 Billion Forecast Crushes Overcapacity Fears
Micron’s forward-looking guidance has served as a massive “risk-remover” for semiconductor investors who feared a potential AI bubble. For the current quarter, Micron is forecasting revenue of $18.7 billion, a staggering 30% higher than Wall Street’s $14.3 billion estimate.
Analysts are responding with aggressive price hikes; Morgan Stanley raised its target to $350 from $338, reiterating Micron as its “top pick in U.S. semis”. The bank noted that as long as the “AI music plays,” Micron will continue to benefit from record-high margins, with gross margins projected to hit 67% in the coming quarter.
Multi-Gigawatt Demand Ignites the Broader Chip Sector
With its technology leadership in HBM4 and 1-gamma DRAM, Micron is now scaling its manufacturing capacity to meet a supply environment that remains “substantially short” of demand. To support this, the company hiked its Fiscal 2026 capital expenditure plan to $20 billion, up from the previously estimated $18 billion.
The “Micron Effect” rippled through the sector on Thursday, lifting major peers such as Nvidia (NVDA), AMD (AMD), and Broadcom (AVGO).
Is Micron a Good Stock to Buy?
Analysts remain highly optimistic about Micron’s long-term prospects. On TipRanks, MU stock has a Strong Buy consensus rating based on 27 Buys and three Hold ratings. The average Micron price target of $311.68 implies 23% upside potential from current levels.
