micron surges as ai demand fuels memory chip boom
Boise, Thursday, 26 June 2025.
micron technology’s forecast has analysts buzzing, exceeding expectations due to soaring demand for ai memory chips. high bandwidth memory (hbm) chip revenue jumped nearly 50% this quarter alone. this surge underscores the intense need for high-performance memory in ai computing. micron anticipates continued growth, driven by increasingly complex ai applications. the company’s strategic investments are aimed at solidifying its tech leadership and meeting the escalating memory demands of the ai revolution. the positive outlook initially boosted micron’s stock, signaling strong growth in the memory chip market.
key financial results
Micron’s third-quarter results for fiscal year 2025 showcased significant growth [5]. Revenue reached $9.3 billion, surpassing analysts’ estimates of $8.87 billion [5]. This represents a 37% increase compared to the $6.81 billion reported in the same quarter last year [5]. Adjusted earnings per share (EPS) stood at $1.91, exceeding expectations of $1.60 [1][5]. The company’s gross margin was 39%, also above the anticipated 36.8% [1][5]. These figures highlight micron’s strong performance, driven primarily by the increasing demand for memory chips in ai applications [1].
hbm drives growth
The surge in demand for high bandwidth memory (hbm) chips has been a major catalyst for micron’s financial success [1]. Hbm revenue increased by nearly 50% quarter-over-quarter, demonstrating the critical role of these chips in ai infrastructure [1][5]. Micron’s data center revenue more than doubled compared to the same period last year, reaching a new quarterly record [1][5]. This growth is fueled by the increasing adoption of ai technologies, which require high-performance memory solutions. Micron expects its hbm market share to align with its dram market share in the second half of this year [1].
q4 forecast exceeds expectations
Micron’s outlook for the fourth quarter of fiscal year 2025 is optimistic, further boosting investor confidence [5]. The company projects revenue of approximately $10.7 billion, a 38% increase year-over-year, compared to analysts’ estimates of $9.9 billion [1]. Adjusted eps is expected to be $2.50, significantly higher than the $2.03 consensus [1][5]. The adjusted gross margin is projected at 42%, exceeding the previously anticipated 39% [1]. This strong guidance reflects micron’s confidence in sustained demand for its memory chips, particularly in the ai sector [1].
market reaction and analysis
Despite the positive earnings report, micron’s stock experienced some volatility in after-hours trading [1][5]. Initially, the stock jumped by 4%, but the gains moderated to 0.92% [1]. This reaction may reflect investor concerns about valuation pressures in the ai sector, as micron’s stock has already risen 51% this year [1][5]. However, analysts remain largely positive on micron’s prospects, citing the company’s strong position in the hbm market and its ability to capitalize on the ai boom. Synovus senior portfolio manager dan morgan noted micron’s efforts to expand memory sales in other areas, such as electric vehicles and gaming [1].
cash flow and capital expenditure
Micron’s financial health is underscored by its robust cash flow [5]. Operating cash flow reached $4.61 billion, showing significant improvement both sequentially and year-over-year [5]. The company’s capital expenditure for the third quarter was $2.66 billion, reflecting its investment in expanding production capacity to meet the growing demand for ai memory [5]. While high capital expenditure can be a concern during industry downturns, micron’s management believes that its disciplined investments will solidify its competitive position and enable it to capture a larger share of the ai-driven memory market [1].
strategic outlook
Micron’s ceo, sanjay mehrotra, emphasized the company’s commitment to disciplined investments to meet ai-driven demand [1]. The company aims to match its hbm market share with its overall dram market share by the second half of 2025, a challenging but potentially rewarding goal [5]. While micron downplayed the impact of tariffs on its business, investors should remain vigilant about macroeconomic risks [1][5]. Ultimately, micron’s ability to translate the current ai tailwinds into sustainable competitive advantages will determine its long-term success and stock performance [5].