Micron Technology's fiscal first-quarter earnings weren't just strong—they were historic. The memory chipmaker reported results that crushed estimates and issued guidance that sent analysts scrambling to revise their models upward. CEO Sanjay Mehrotra's message was simple: demand for AI memory chips is "unprecedented" and the company is "more than sold out" for the foreseeable future.

The Blowout Numbers

Micron's Q1 fiscal 2026 results exceeded all expectations:

  • Adjusted EPS: $4.78 vs. $3.95 expected — 21% beat
  • Revenue: $13.64 billion vs. $12.84 billion expected — 6% beat
  • Year-over-year growth: Revenue surged 57%

But it was the guidance that really moved the stock.

Explosive Forward Outlook

Micron's fiscal second-quarter forecast stunned the market:

  • Q2 revenue guidance: $18.3-$19.1 billion vs. Street estimate of $14.4 billion
  • Q2 EPS guidance: $8.22-$8.62 vs. Street estimate of $4.71

That's nearly double what analysts had projected. Shares jumped 10% in after-hours trading on the news.

The HBM Supercycle

At the center of Micron's story is High Bandwidth Memory (HBM)—the specialized chips that power AI accelerators from Nvidia and AMD. Business Chief Sumit Sadana was emphatic: "We are more than sold out. The demand is substantially higher than supply for the foreseeable future."

Key HBM developments:

  • 2026 supply: Completely committed—Micron has finalized price and volume agreements for all of next year's HBM production
  • HBM4 secured: Even the next-generation technology is already spoken for
  • Market outlook: The HBM market is projected to grow from $35 billion in 2025 to $100 billion by 2028

Why Memory Matters for AI

AI training and inference require massive amounts of memory bandwidth. HBM chips sit directly next to GPU processors, enabling the data throughput necessary for large language models and other AI applications. As models grow larger and more data centers come online, memory demand scales accordingly.

Micron is one of only three companies worldwide capable of producing cutting-edge HBM (along with Samsung and SK Hynix). This oligopoly structure gives producers significant pricing power in a supply-constrained market.

Analyst Reactions

Wall Street responded with significant price target increases:

  • Rosenblatt: Raised target from $300 to $500 — 88% upside from current levels
  • Morgan Stanley: Increased target from $338 to $350, calling Micron a top semiconductor pick
  • Multiple firms: Reiterated Buy ratings with targets in the $300-400 range

Stock Performance

Micron shares have surged 168% in 2025, making it one of the top-performing semiconductor stocks. The stock is trading around $266 after the earnings pop, with momentum firmly in its favor.

The company's market cap now exceeds $290 billion, cementing its position as a major player in the AI infrastructure ecosystem.

Risks to Consider

Despite the euphoria, investors should consider potential headwinds:

  • Cyclicality: Memory markets are notoriously cyclical; current conditions are peak-cycle
  • Competition: Samsung and SK Hynix are investing heavily in HBM capacity
  • Customer concentration: Nvidia dominates AI accelerator demand; any slowdown there would ripple through
  • Valuation: At 20x forward earnings, much good news is priced in

The Bottom Line

Micron's earnings report provides the clearest evidence yet that AI memory demand remains insatiable. A company describing itself as "more than sold out" through 2026 is a company with pricing power and visibility that most semiconductor peers can only dream of. Whether the stock can grow into its $500 price target depends on the AI buildout continuing unabated. For now, the supercycle shows no signs of slowing.