Micron Surges After Earnings Beat as AI Memory Shortage Seen Lasting Through 2027
High-bandwidth memory, or HBM, is a critical component that allows AI accelerators from companies such as NVIDIA to exchange large volumes of data rapidly. Data-center expansion driven by generative AI has transformed memory from a highly cyclical commodity into a strategic supply-chain asset. Micron Technology is one of the few companies capable of supplying advanced HBM and is working with NVIDIA to secure orders for new platforms.
On June 24, Micron reported revenue of $41.46 billion for its fiscal third quarter ended May 28, up 346% from a year earlier, with non-GAAP earnings of $25.11 per share. It forecast fourth-quarter revenue of $50 billion, plus or minus $1 billion, sending its shares up more than 15% in after-hours trading. The company has signed 16 strategic customer agreements lasting at least five years and expects tight memory supply and demand conditions to persist beyond 2027.
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The history behind this eventAI Infrastructure Demand Fuels Micron Memory Supercycle, Profit Outlook
Generative AI and AI agents are driving data-center demand for DRAM and HBM, but insufficient wafer-fab expansion and HBM's displacement of conventional DRAM capacity have left supply and demand persistently tight. Aletheia Capital expects memory's share of AI system value to rise from more than 40% in 2025 to over 70% in 2027, placing Micron at the heart of the supercycle.
FactSet estimated on June 29 that Micron's operating profit would reach $130.4 billion in 2026 and rise 54% to $200.8 billion in 2027, lifting its ranking among S&P 500 companies from fifth to third. In a separate estimate on June 15, Aletheia Capital forecast that EPS would increase 8.5-fold in 2027 and that free cash flow would total $350 billion to $400 billion across fiscal years 2026 through 2028.
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