If there were any remaining doubts about whether artificial intelligence would fundamentally reshape the semiconductor industry, Micron Technology just obliterated them. The memory chipmaker delivered a fiscal first-quarter earnings report so strong that it sent shares soaring 14% and reignited enthusiasm across the entire tech sector.
The Numbers That Stunned Wall Street
Micron reported record revenue of $13.64 billion for the quarter ended November 2025—a staggering 57% increase from the same period last year. But the headline number only tells part of the story.
Non-GAAP earnings per share came in at $4.78, nearly double the $1.79 reported in the prior year and well ahead of the $3.95 consensus estimate. Gross margins expanded to 56.8%, a remarkable figure for an industry that has historically been characterized by brutal price competition and razor-thin margins.
DRAM revenue alone rose 69% to $10.8 billion, driven almost entirely by AI-linked demand for high-bandwidth memory (HBM).
The Guidance That Changed Everything
If the quarterly results were impressive, the forward guidance was jaw-dropping. Micron projected second-quarter revenue of $18.7 billion—nearly $4 billion higher than what analysts had modeled—with earnings per share guidance of $8.42.
To put this in perspective: Micron is guiding to quarterly revenue growth of 37% sequentially. That's not annual growth. That's quarter-over-quarter acceleration in what's already a record-breaking trajectory.
HBM: Sold Out Through 2026
The announcement that silenced AI skeptics: Micron's High Bandwidth Memory supply is completely sold out through the end of calendar year 2026. The company expects the total addressable market for HBM to hit $100 billion by 2028, growing at a 40% compounded annual growth rate.
CEO Sanjay Mehrotra confirmed that the company is already preparing for the ramp-up of HBM4 in late 2026, with pricing expected to be "significantly higher" than current generations. When demand exceeds supply by this margin, pricing power shifts dramatically to manufacturers.
Capital Expenditure Surge
Micron upped its capital expenditure guidance to $20 billion from $18 billion, signaling confidence that the AI memory boom has years to run. Management also guided to 68% gross margins as memory prices continue rising—a level that would have seemed fantasy just two years ago.
What This Means for Investors
Major financial institutions responded immediately. Morgan Stanley and Bank of America raised their price targets, with some analysts now eyeing the $338 level. The results validated what bulls have been arguing: memory has transformed from cyclical commodity to structural growth story.
The broader implications extend beyond Micron. If memory is the chokepoint for AI infrastructure, then every company building AI data centers—from Nvidia to the hyperscalers—faces potential constraints. The supply-demand imbalance may persist longer than anyone expected.
The Bottom Line
Micron's earnings weren't just good—they were a statement about the AI-driven transformation of the semiconductor industry. The memory supercycle isn't a theory anymore. It's showing up in revenue, margins, and sold-out capacity extending years into the future. For investors in AI infrastructure, this is the confirmation they've been waiting for.
