Shares of chipmaker Micron (MU) jumped in after-hours trading after the company reported earnings for its third quarter of Fiscal Year 2025 that were accompanied by strong guidance. Earnings per share came in at $1.91, which beat analysts’ consensus estimate of $1.60 per share. Sales increased by 36.6% year-over-year, with revenue hitting $9.3 billion. This also beat estimates of 8.86 billion. In addition, the firm reported an adjusted operating income margin of 26.8%, while operating cash flow came in at $4.61 billion versus the $3.94 billion in the prior quarter and the $2.48 billion for the same period last year.
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These results were driven by record sales of DRAM memory and a nearly 50% jump in HBM (high-bandwidth memory) sales. Interestingly, these fall under the firm’s compute and networking segment, which accounts for the largest portion of revenue, as per the image below.
Data center revenue more than doubled compared to last year, and sales in consumer markets also grew strongly. As a result, CEO Sanjay Mehrotra stated that the company is on track to achieve record revenue for the full year, with strong profits and free cash flow, as it continues to invest in technology and manufacturing to meet the rising demand for AI.
Q4 2025 Outlook
Looking ahead to the fourth quarter of 2025, revenue is expected to be between $10.4 billion and $11 billion, with the midpoint significantly above the estimated $9.88 billion. Moreover, Micron projects adjusted earnings in the range of $2.35 to $2.65 per share, which is a big beat compared to the $2.03 per share consensus estimate.
Is MU a Good Stock to Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on MU stock based on 13 Buys, three Hold, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average MU price target of $127 per share implies that shares are fairly valued. However, it’s worth noting that estimates will likely change following today’s earnings report.
