Micron’s Stunning Forecast Redefines AI Memory Market Expectations

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Wall Street analysts were left reeling after Micron Technology released quarterly results that shattered even the most optimistic projections. The memory chip giant didn't merely exceed expectations—it delivered a current-quarter outlook that nearly doubles consensus estimates. In pre-market trading Thursday, the company's shares surged approximately 8%.

Central to the explosive financial performance is the insatiable market need for High Bandwidth Memory (HBM), the specialized component powering artificial intelligence data centers. During the earnings call, CEO Sanjay Mehrotra revealed a staggering detail: Micron's entire HBM production capacity for the 2026 calendar year is already committed to customers, with both pricing and volumes locked in by contract.

The supply situation presents a double-edged sword. While fueling extraordinary financial metrics, Micron currently fulfills only 50% to 67% of demand from its key customers. Mehrotra anticipates these supply constraints will persist "beyond the calendar year 2026," highlighting a severe industry-wide shortage.

Financial Performance Exceeds All Benchmarks

For its fiscal first quarter ended November 2025, Micron reported revenue of $13.64 billion, representing year-over-year growth of 57%. Earnings per share skyrocketed 167% to $4.78, decisively beating the analyst consensus estimate of approximately $4.

The forward guidance is where expectations were utterly upended. Management forecasts revenue of $18.7 billion and EPS of $8.42 for the ongoing quarter ending February 2026. This dwarfs the average analyst prediction of $14.3 billion in revenue and $4.71 in per-share profit.

Pricing Power and Strategic Investment

The supply-demand imbalance is translating into remarkable pricing strength across the memory sector. In a related development, Kingston Technology noted on December 17 that NAND wafer prices had surged 246%, with the most significant increase occurring within the preceding 60 days. This pricing power is evident in Micron's financials, as gross margins expanded to 56.8%, an 11-percentage-point improvement from the prior quarter.

To address the capacity crunch, Micron is aggressively ramping capital expenditures. The company has raised its investment plan for fiscal 2026 from $18 billion to $20 billion. Furthermore, management has revised its long-term market assessment, now projecting the total addressable HBM market will reach $100 billion by 2028—two years earlier than its previous 2030 estimate.

With production fully booked through 2026, Micron operates with exceptional visibility. The primary challenge now is the pace at which it can bring new manufacturing capacity online to capture unmet demand. The scale of the earnings beat and guidance upgrade is likely to trigger a wave of revised price targets from research analysts in the coming weeks.