Micron Technology delivered a blowout quarter that underscored just how far the artificial-intelligence boom has reshaped the memory-chip industry, sending its shares up roughly 17 percent on Thursday and helping steady a Wall Street session otherwise weighed down by sliding oil and a softer technology tape. The Boise, Idaho-based company reported fiscal third-quarter revenue of $41.5 billion, beating analyst expectations of about $35.9 billion by more than $5 billion.
The headline figures were extraordinary for a business long known for brutal boom-and-bust cycles. Adjusted earnings came in at $25.11 per share, and gross margins reached a record of roughly 84.6 percent — a level almost unheard of for a maker of memory chips, which have historically been treated as interchangeable commodities sold at razor-thin margins. Shares climbed to about $1,224 in the session, extending a powerful run for the stock.
At the center of the surge is high-bandwidth memory, or HBM, the specialized, stacked memory that sits alongside Nvidia and other companies' AI accelerators in data centers. Micron said its HBM output is sold out for all of 2026, making it the company's most profitable product line. Data-center revenue reached $25 billion in the quarter, and enterprise solid-state drives added another $5 billion.
Most striking was the guidance. Micron told investors to expect roughly $50 billion in revenue in the current quarter, plus or minus $1 billion — about 15 percent above the $43.6 billion analysts had penciled in — with adjusted earnings of $30 to $32 a share and gross margins potentially expanding toward 86 percent. The company also disclosed 16 take-or-pay strategic customer agreements that lock in roughly $100 billion in minimum contracted revenue and $22 billion in upfront customer cash.
Those contracts are a signal in themselves. Take-or-pay deals require customers to pay for capacity whether or not they use it, and the willingness of AI-hungry buyers to commit billions upfront reflects a scramble to secure memory supply that is running short. For an industry that spent decades whipsawed by gluts and shortages, locking in demand years ahead marks a profound shift in pricing power toward the chipmakers.
Micron's results landed against a mixed market backdrop. The S&P 500 edged up modestly while investors also parsed the Federal Reserve's preferred inflation gauge, and oil prices extended their slide, with U.S. crude trading around the low $70s a barrel after the easing of Middle East supply fears. Micron's strength, alongside other chip names, helped offset weakness elsewhere in technology.
The flip side of Micron's windfall is already reaching consumers. The same memory shortage driving its record margins has pushed Apple to warn that device prices will rise and prompted Microsoft to announce higher Xbox console prices, as the AI sector's voracious appetite for memory crowds out the supply available for phones, PCs and game consoles.
The open question for investors is how long the boom can run. Memory has always eventually returned to surplus as producers race to add capacity, and Micron's rivals are expanding aggressively. For now, though, demand from AI data centers shows little sign of cooling, and the take-or-pay contracts suggest Micron's customers are betting the squeeze will persist well into next year.