Micron said its chips are booked up for 2026 and beyond and the total addressable market for the company is growing at a faster clip than earlier projected.
- MU stock rallied 15% in overnight trading ahead of Thursday.
- Analysts praised Micron’s comments on the durability of memory chip demand, while retail traders said the results confirmed what was already forecast from the record-high spending from cloud companies.
- Stocktwits sentiment for MU was ‘extremely bullish’ early Thursday.
Micron Technology, Inc. stormed the gates with a blowout third-quarter report, sending its shares soaring 15% in overnight trading ahead of Thursday and sparking a rally across semiconductor stocks, as the memory-chip maker signaled that AI-driven demand and tight supply conditions would persist through at least 2028.
“Our demand for HBM [high bandwidth memory], not just in '27, but even '28 is well above our ability to supply across all the different HBM flavors. And it's also true -- the same thing is also true, by the way, for non-HBM DRAM as well,” Micron Chief Business Officer Sumit Sadana said on the company’s analyst call.
CFO Mark Murphy said Micron’s target market is growing at a faster clip than earlier projected. “We had said previously that it [total addressable market] would cross $100 billion in '28, you see that now the HBM TAM easily crossing $100 billion in '27."
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 $20.28 per share. The report triggered a sharp rally in shares of peers SanDisk and Western Digital, as well as legacy chipmakers like Intel.
MU Earnings Draw Wall Street Cheer
Analysts cheered the blowout performance, with particular praise for the durability of the demand. “The most underappreciated data point on MU’s earnings call was that the number of five-year SCAs [strategic customer agreements] increased from one last quarter to seven this quarter,” said Deepwater Asset Management analyst Gene Munster.
“That’s significant because it suggests customers expect this buildout to last for at least five years and want greater pricing visibility over that time frame.”
In other words, Micron customers have booked orders for the next several years at the currently prevailing high prices, giving the company exceptional revenue visibility.
Given the sharp gains in profit and future projections – Micron’s gross margin more than doubled to 84.9% – analysts note that the company’s valuation still appears rather attractive.
“The business is strong. The setup is challenging. But then there's that silly low forward PE ~10x,” said Patrick Moorhead of Moor Insights.
“$MU forward multiples may be similar to one year ago but the metrics couldn’t be more different,” said Daniel Newman, CEO of The Futurum Group. “Adjusted EPS expected to be up ~1000%. Revenue growth >270%. Margins jump to ~81%. AI is a different cycle. So long as the capex cycle remains intact (and it will), Micron is still undervalued.
Analysts said the focus is now on how comfortably Micron expands capacity. Micron plans to spend approximately $10 billion on capital expenditures during the fourth quarter, with total capital expenditures for fiscal 2026 projected to reach $27 billion, or about double last year’s spend.
Retail View On MU
On Stocktwits, retail sentiment for MU climbed multiple points higher in the ‘extremely bullish’ zone (88/100) from the previous day, while 24-hour message volume more than doubled.
“$MU Wont be surprised if this hits $1500 by Friday,” said a trader, projecting a 43% increase from the stock’s closing price on Wednesday.
Memory demand is “outrunning supply, and the beat only confirmed what the capex already said,” another trader wrote. “The selloff that ran into this print was never a read on fundamentals. It was positioning,” they said, referring to the two-day drop before the results were issued.
As of their last close, Micron shares are up 268% year to date.
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