Micron earnings surge on AI demand, bringing record revenue

Core Insights - Micron experienced a record-breaking fiscal 2025, driven by strong demand in the AI sector, with revenue reaching $11.3 billion, a 22% increase from the previous quarter and a 46% increase year-over-year [1][2] - The company's data-center business was pivotal, contributing over half of total sales, with high-bandwidth memory (HBM) revenue nearly doubling to almost $2 billion [2] - For the full year, Micron reported $37.4 billion in revenue, a nearly 50% increase from 2024, and non-GAAP net income surged to $9.5 billion, with gross margins improving to 41% from 24% [3] Financial Performance - Micron's adjusted earnings per share (EPS) for the last quarter were $3.03, up from $1.91 in the previous quarter and significantly higher than $1.18 reported a year ago [1] - The company generated $17.5 billion in operating cash, enabling substantial investments in new facilities in Idaho, Japan, and New York, supported by approximately $6 billion in U.S. CHIPS Act grants [3] Future Outlook - Looking ahead, Micron anticipates first-quarter 2026 revenue of $12.5 billion, with gross margins expected to exceed 50% for the first time in years, and adjusted EPS projected at around $3.75 [4] - Despite these positive projections, Micron's stock fell 1% in premarket trading, indicating market skepticism regarding the sustainability of its growth [4][5] Industry Context - The chip industry is characterized by cyclical trends, and management acknowledged potential risks from tariffs and shifts in global supply chains [5] - Federal economic policy remains a wildcard, creating uncertainty for U.S. businesses, with potential benefits from subsidies countered by risks associated with changing policies [6]