The company projected second-quarter adjusted profit at nearly double analysts’ estimates, benefiting from tight supply conditions across memory markets. From smartphones to hyperscale data centres, constrained availability has pushed up prices, creating a favorable pricing environment for suppliers such as Micron.
“Tight memory supply caused by immense artificial intelligence infrastructure demand is boosting incredible market pricing for Micron and its memory chip peers,” Morningstar analysts said in a note, describing the current phase as a powerful cyclical upswing that is generating substantial shareholder value.
Micron is one of only three major global producers of high-bandwidth memory (HBM) chips, alongside South Korea’s Samsung Electronics and SK Hynix. These chips are critical for training and deploying generative AI models, placing Micron at the center of the AI supply chain.
The rally adds to an already stellar year for the company. Micron shares are up more than 160% so far this year, while Samsung and SK Hynix have seen their South Korea–listed shares more than double and triple in value, respectively. Micron’s stock has also outperformed peers such as Advanced Micro Devices and Nvidia in 2025, driven by sustained demand for AI-focused memory products.
If the premarket gains are sustained, Micron stands to add more than $30 billion to its market capitalization. Speaking on an earnings call on Wednesday, Chief Executive Sanjay Mehrotra said he expects memory markets to remain tight beyond 2026, signaling confidence that demand will continue to outstrip supply.
The memory industry is notoriously cyclical, marked by sharp booms and downturns linked to volatile pricing. While analysts differ on how long the current “supercycle” will last, there is broad agreement on Wall Street that supply shortages could persist longer than Micron’s own projections, even as manufacturers expand capacity.
To capitalize on the surge in AI-related demand, Micron has been retooling its manufacturing facilities and prioritizing production for data centres. The company also raised its 2026 capital expenditure plans to $20 billion, reflecting aggressive investment to meet future demand.
Looking ahead, Morningstar analysts expect pricing strength to ease over the long term but believe supply tightness could extend well into 2027. J.P. Morgan shares a similar view, forecasting that shortages may persist through that year. However, analysts caution that Micron must carefully balance its wafer capacity, allocating enough resources to high-margin HBM chips while continuing to serve customers in lower-margin sectors.
The outlook highlights both the opportunities and challenges facing Micron as AI reshapes the global semiconductor landscape.