Micron Technology Inc (NASDAQ:MU) Surges on Record AI-Driven Earnings and Explosive Guidance

Micron Technology Inc (NASDAQ:MU) shares surged in after-hours trading on Wednesday following the release of fiscal first-quarter results that handily exceeded Wall Street's expectations. The memory and storage chipmaker delivered record revenue and a significantly stronger profit outlook, fueled by intense demand for its high-bandwidth memory (HBM) and other products critical for artificial intelligence (AI) applications.

Record Quarterly Results

For its first quarter of fiscal 2026, which ended November 27, 2025, Micron reported revenue of $13.64 billion, a substantial increase from $8.71 billion in the same period last year. This result surpassed the analyst consensus estimate of approximately $13.19 billion. The company’s profitability saw an even more dramatic expansion.

• Non-GAAP Earnings Per Share (EPS): $4.78, significantly above the $4.05 analysts had forecast.
• GAAP Net Income: $5.24 billion, compared to $1.87 billion a year ago.
• Gross Margin: Reached 56.8% on a non-GAAP basis, up from 39.5% in the prior-year period, reflecting improved pricing and a favorable product mix.

The company also generated robust cash flow, with operating cash flow coming in at $8.41 billion. CEO Sanjay Mehrotra attributed the performance to "significant margin expansion" across all business units and Micron's positioning as "an essential AI enabler."

Market Reaction and Forward Guidance

The immediate market reaction was decisively positive, with the stock rising sharply in extended trading. This bullish sentiment was primarily driven by Micron's outlook for the current quarter (Q2 FY2026), which far exceeded existing analyst forecasts.

The company provided the following guidance for Q2:

• Revenue: $18.70 billion, plus or minus $400 million.
• Non-GAAP EPS: $8.42, plus or minus $0.20.

These projections stand in stark contrast to analyst expectations, which had been modeling revenue of approximately $14.47 billion and EPS estimates around $4.25 for the coming quarter. The guidance implies another sequential leap in revenue and a near-doubling of earnings per share, underscoring management's confidence in sustained demand strength.

Business Unit Performance and AI Demand

Micron’s results highlighted the bifurcation in the semiconductor market, where AI-related demand is creating exceptional strength. The Cloud Memory Business Unit, which serves data center customers, was a standout performer with revenue of $5.28 billion and an operating margin of 55%. The Mobile and Client Business Unit also showed remarkable margin improvement, with its operating margin jumping to 47% from 15% a year ago.

The company's commentary consistently emphasized its role in the AI infrastructure build-out. Demand for HBM, a premium memory product essential for training and running large AI models, is exceeding supply, contributing to the favorable pricing environment and record profitability.

Conclusion

Micron’s fiscal first-quarter report was a clear beat-and-raise event, with both top and bottom-line results surpassing expectations. The exceptionally strong guidance for the current quarter signals that the AI-driven demand cycle for memory chips has further to run, with supply constraints likely supporting pricing power in the near term. The market's enthusiastic after-hours reaction reflects a reassessment of Micron's earnings potential in this new environment.

For a detailed look at historical earnings, future estimates, and analyst ratings for Micron Technology, visit the earnings and estimates page on Chartmill.

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