Micron stock climbs 16% after AI-fueled Q3 revenue tops forecasts at $41.46 billion

Micron posted fiscal third-quarter results that exceeded Wall Street projections as the chipmaker rode continued strong demand linked to artificial intelligence.

Micron beats estimates and sees stock surge in extended trading. The company recorded revenue of $41.46 billion against LSEG consensus of $35.84 billion. Adjusted earnings per share reached $25.11, surpassing the $20.78 forecast. Shares climbed over 16% in after-hours trading on Wednesday.

Revenue soared across all business units with data center leading the gains. Sales rose from $9.3 billion in the prior-year quarter. Data center revenue grew more than sevenfold to $11.5 billion from $1.53 billion. Cloud memory increased over 300% to $13.77 billion. The mobile and client segment expanded over 250% to $11.52 billion. Automotive and embedded sales more than quadrupled to $4.63 billion.

Gross margin and net income show sharp improvement. Gross margin expanded to 84.9% from 74.9% in the previous quarter and 39% a year earlier, beating analyst projections. Net income totaled $28.24 billion, or $24.46 per share, versus $1.89 billion, or $1.68 per share, in the year-ago period.

Long-term customer agreements lock in future revenue. Micron has entered 16 multiyear contracts with data center operators, automakers and additional clients spanning three to five years. Once in place, the pacts are projected to represent approximately half or more of total company revenue. The deals carry $22 billion in financial commitments backed by binding volume purchases.

CEO points to prolonged memory shortages and raises guidance. "Our customers are recognizing that supply shortages in memory and storage will take considerable time to improve, even as we expect industry supply to improve gradually in 2028," Micron CEO Sanjay Mehrotra told analysts. The firm now anticipates current-quarter revenue of about $50 billion, compared with $11.3 billion a year earlier and above the $43.58 billion consensus. Shareholders will receive a 15 cent dividend in July.

The performance comes after Micron's shares gained roughly 700% in the past year, pushing its market value above $1 trillion. The company ranks among the leading beneficiaries of the AI surge that has generated record need for its memory components inside Nvidia and Google processors as well as the servers containing them.