Micron Technology delivered one of the semiconductor sector's most striking quarterly results in recent memory, yet the market responded by selling the stock for four consecutive sessions after the report.
Fiscal second-quarter earnings per share came in at a level nearly 500% above the year-earlier period, against analyst consensus of $9.31, according to LSEG data. Revenue approximately tripled year-on-year and topped estimates. Guidance for the third quarter pointed to roughly $33 billion in revenue, a figure that prompted at least one analyst to describe the supply shortage as "just getting started."
The demand picture is unambiguous. Micron's chief executive acknowledged after the results that the company cannot deliver enough memory to satisfy key customers, having previously disclosed it could meet only 50% to two-thirds of their requirements. Global AI data-centre investment hit $61 billion in 2025 and continues to drive insatiable appetite for high-bandwidth memory and advanced DRAM, both areas where Micron is a primary supplier.
Analyst support is correspondingly strong. Forty of 44 analysts who cover the stock carry a buy or strong buy rating. Deutsche Bank, Baird, TD Cowen and Citi all hold buy-equivalent ratings, with price targets from $430 to $500. Morgan Stanley is overweight with a $450 target, citing a through-cycle earnings estimate of $18 per share underpinned by high-bandwidth memory economics. Baird projects DRAM pricing rising more than 100% quarter-on-quarter in the first calendar quarter, followed by a further 40%-plus gain in the second.
The market's scepticism centres on cycle duration. Memory is a notoriously cyclical industry, and investors are questioning whether the current shortage-driven pricing surge can persist long enough to justify valuations built on peak-cycle margins. Micron's capital expenditure plans, which include a facility in Central New York that could eventually cost $100 billion and two Idaho plants expected online by end-2028, add to near-term cash outflow concerns.
Morgan Stanley's Joseph Moore framed the central investor question clearly before results: views on cycle duration, the degree to which Micron is undershipping end demand, and long-term agreement structures with customers would be the key variables. The earnings answered two of the three convincingly. Whether this cycle has months or years left is still unresolved, and that ambiguity is what the share price is reflecting.
