AI boom boosted Q3 performance beyond expectations, Micron Technology, Inc. (MU.US) receives analyst support.

Micron Technology, Inc. (MU.US) reported better-than-expected performance for the third quarter and provided guidance for the fourth quarter. The memory chip manufacturer reported that third-quarter revenue reached a historic high, increasing by 37% year-on-year to $9.3 billion, exceeding analysts' average expectations of $8.9 billion; adjusted earnings per share were $1.91, higher than analysts' expectations of $1.60. The company stated that third-quarter revenue was mainly driven by historically high sales of its DRAM chips. In particular, revenue from High Bandwidth Memory (HBM) chips increased by nearly 50% quarter-on-quarter. Looking ahead, Micron Technology, Inc. expects fourth-quarter revenue to be around $10.7 billion, far exceeding analysts' average expectations of $9.89 billion; adjusted earnings per share for the fourth quarter are expected to be around $2.50, higher than analysts' average expectations of $2.03. At the time of writing, Micron Technology, Inc. stock was up nearly 2% in pre-market trading on Thursday. This better-than-expected performance has received positive reviews from Wall Street analysts. Morgan Stanley maintained a "hold" rating on Micron Technology, Inc. and raised its price target from $98 to $135. Analysts led by Joseph Moore stated that their earnings per share expectations for Micron Technology, Inc.'s fourth quarter are more than 20% higher than market consensus, and the company's guidance is in line with their forecasts, mainly due to accelerated shipment growth and higher average selling prices (ASP) of core DRAM products. Analysts noted that while the large performance turning point has passed, they expect performance to continue to improve through 2025 driven by strong AI demand. Analysts stated, Even with concerns about demand being pulled forward or the phenomenon of price declines in the May quarter, this should not diminish market enthusiasm for Micron Technology, Inc.'s narrative - the company is still a winner benefiting from artificial intelligence (AI), and the traditional DRAM business continues to improve. However, for AI-driven investors, we believe there are still more attractive options in the semiconductor sector. Analysts also added that Micron Technology, Inc.'s HBM business remains strong. However, they also stated that they remain cautious about potential risks in this trend. They pointed out that structural unfavorable factors from the consumer sector should gradually fade, and strong AI demand will continue to support margin performance. Analysts also noted that while tariff issues exist, management's candid response to this is a positive sign, but they believe tariffs are not the main driver of the stock's recent price strength. Wells Fargo & Company reiterated a "hold" rating on Micron Technology, Inc. and raised its price target from $150 to $170. Analysts led by Aaron Rakers stated that Micron Technology, Inc.'s HBM business, along with the continued strength of the overall data center market, and continued tightening of inventory levels (DRAM inventory constrained in the first half of fiscal year 2026), are expected to keep investors focused on its upside potential. Jefferies Financial Group Inc. analysts led by Masahiro Nakanomyo stated that Micron Technology, Inc.'s third-quarter revenue exceeded guidance and the fourth-quarter guidance is also higher than market expectations. While the macro environment remains uncertain (such as the impact of tariffs), there are currently no signs of any changes in memory demand by 2025. Analysts also added that investments in HBM by Micron Technology, Inc. are expected to remain strong. Additionally, in the NAND field, Micron Technology, Inc. is expected to increase investment in next-generation thin film deposition equipment.