Micron Capitalizes on Surging AI Demand with Record Forecasts

Micron Technology has delivered a staggering financial performance, shattering Wall Street's expectations. The memory chip manufacturer reported revenue of $13.64 billion for its first fiscal quarter of 2026, representing a 57% year-over-year increase and a figure that comfortably exceeded analyst projections. However, the truly explosive news was the company's guidance: for the current quarter, Micron anticipates revenue of approximately $18.7 billion, dramatically outpacing the $14.3 billion consensus estimate.

The driving force behind this surge is an acute shortage of High Bandwidth Memory (HBM), a specialized chip critical for artificial intelligence data centers. Micron's CEO, Sanjay Mehrotra, summarized the situation starkly, stating the company is "sold out" for all of 2025 and is already "more than sold out" for 2026. Major clients, including Nvidia and AMD, are competing for supply while production capacity remains constrained.

This supply-demand imbalance has granted Micron significant pricing leverage. The company forecasts its gross margin will climb to around 68% in the ongoing quarter, a clear indicator of its strengthened market position. Adjusted earnings per share are now expected to be between $8.22 and $8.62, nearly double the analyst estimate of $4.71.

Wall Street Responds with Aggressive Target Hikes

The financial community reacted swiftly to the report. Analysts from Citigroup raised their price target to $330, while Rosenblatt Securities set a target of $500. Bank of America upgraded the stock to a "Buy" rating with a $300 target. Morgan Stanley analysts characterized the results as "likely the best revenue and earnings surprise in the U.S. semiconductor sector outside of Nvidia."

Should investors sell immediately? Or is it worth buying Micron?

Following the announcement, Micron shares closed at $265.92 on Friday, marking a gain of roughly 7%. The stock has advanced more than 200% since the start of the year, cementing its status as a top performer within the Nasdaq-100 index.

Insider Sales Contrast with Bullish Outlook

A notable detail provides a counterpoint to the overwhelmingly positive narrative: corporate insiders sold shares worth over $79 million in the previous quarter. CEO Sanjay Mehrotra alone divested stock valued at approximately $34 million. While such transactions can be part of pre-scheduled trading plans, their timing coincides with the stock trading at record highs.

Long-Term Capacity Expansion Underway

To address the long-term supply crunch, Micron is investing $20 billion to expand manufacturing capacity in Idaho and Singapore. However, these new facilities are not expected to contribute meaningfully to production until 2027 or 2028 at the earliest. Consequently, the supply situation is projected to remain tight for the foreseeable future, with Micron retaining considerable power to set prices. The coming weeks will reveal whether the equity can challenge the psychological $300 barrier or if it consolidates following its steep rally.