WDC, STX, SNDK, INTC, AMD: Chip Stocks Rally After Micron's Stellar Q3 Earnings

Micron blew past expectations for third-quarter revenue and profit on Wednesday.

• Shares of peer stocks SanDisk and Western Digital rallied over 12% in the overnight session.
• Booming demand for memory chips from AI data centers and component shortages have fueled a memory supercycle, benefiting the major players in the sector.
• Stocktwits sentiment for MU and DRAM was ‘extremely bullish.’

Memory chip stocks rallied in overnight trading late Wednesday, joining Micron after the chipmaker posted record fiscal third-quarter results and indicated that rapid growth will be sustained over the next few years.

SanDisk and Western Digital stocks rose over 12% each, while Seagate shares were up 10%. 

Micron’s stock was up nearly 16%, and the Roundhill Memory ETF (DRAM) was up 10%. The euphoria spilled over to legacy chipmakers as well, with Intel and Advanced Micro Devices stocks climbing 5.4% and 3.7% respectively.

Micron said revenue increased 346% to $41.46 billion last quarter, handily beating analysts’ expectations of $35.3 billion. Earnings came in at $25.11 per share, beating expectations of $20.28 per share.

Notably, Micron’s gross margin surged to 84.9% in the third quarter from 39% a year earlier, placing it among the highest-margin companies in the technology sector. The company’s revenue and profit outlook for the current quarter, which ends in August, also blew past expectations.

MU Sees Multi-Year Demand Visibility

Booming demand for memory chips from AI data centers and component shortages have fueled a memory supercycle, benefiting major players including SanDisk, Seagate, and Western Digital as well as Korean giants SK Hynix and Samsung.

Micron management said the chip shortage would go beyond 2027, a significant change from previous guidance that called for it to end by the start of next year.

“Supply shortages in memory and storage will take considerable time to improve,” CEO Sanjay Mehrotra said on the call. “Even as we expect industry supply to improve gradually in 2028, we currently do not have line of sight as to when memory supply will be able to catch up with increasing demand.”

Mehrotra's remarks also come as the most direct rebuttal to "The Big Short" investor Michael Burry's memory storage cycle-top thesis from earlier this month, in which he said, "multi-year contracts are the feature that will become the bug."

Analyst, Retail View On MU, Memory Stocks

“This is a significant positive for the AI trade, and evidence that the demand could outpace supply into late CY28 or even CY29. Hard to believe,” Gene Muster of Deepwater Asset Management wrote on X.

On Stocktwits, retail sentiment for MU climbed multiple points higher in the ‘extremely bullish’ zone (88/100) from the previous day. The sentiment remained ‘extremely bullish’ for DRAM, and ‘bullish’ for STX, SNDK, and WDC. The stocks are poised to hit fresh highs on Thursday if overnight gains hold.

“$DRAM $MU $KORU Handing off to Korea now. Take this to the next level! God Bless,” a trader said. 

Sentiment across the chips sector was also boosted by SK Hynix announcing its plans to list its shares on Nasdaq next month, as well as Qualcomm announcing upbeat long-term targets. 

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