Did Micron's Blowout Quarter Just Smash AI Bubble Worries?

Core Insights - Micron Technology reported record-setting fiscal first-quarter 2026 results, exceeding Wall Street estimates significantly [1][4] - The company experienced unprecedented growth across all business segments, driven by strong demand for high-bandwidth memory (HBM) and products used in AI applications [2][4] - Micron raised its outlook well above consensus expectations, indicating robust underlying demand despite concerns about an AI bubble [2] Financial Performance - Micron generated record operating cash flow of $8.41 billion and achieved margin expansion across all business units [3] - Revenue reached $13.64 billion, a 57% year-over-year increase from $8.71 billion, with adjusted earnings of $4.78 per share, surpassing analyst estimates of $3.95 per share [4] - The company reported GAAP net income of $5.24 billion, or $4.60 per share, and increased its fiscal 2026 capital expenditure plan to $20 billion from $18 billion to expand HBM and advanced DRAM production capacity [6] Market Outlook - Micron forecasts the HBM market to grow at a 40% compound annual rate through 2028, potentially reaching approximately $100 billion, nearly triple the $35 billion in 2025 [5] - Following the earnings release, Micron shares surged 13.5% in premarket trading, reflecting investor confidence in sustained AI demand [12] - JPMorgan identified semiconductors as a prime area for AI investment exposure, emphasizing the multi-year pricing power of the physical infrastructure layer amid supply constraints [12] Industry Dynamics - The AI ecosystem is diverging into two camps: chipmakers like Micron benefiting from high demand for semiconductors, and infrastructure providers facing scrutiny over scaling costs [7][10] - Companies like Oracle and CoreWeave are experiencing challenges related to financing and execution risks in their AI infrastructure projects [8][9]