Tech ETFs to Buy as Micron Rallies 10% Post Q1 Earnings Beat

Core Insights - Micron Technology Inc. (MU) shares increased by 10.1% following the release of better-than-expected first-quarter fiscal 2026 results, surpassing analysts' estimates on both revenue and earnings [1][11] - The company's strong performance reflects investor optimism regarding record revenues and significant margin expansion in the fiscal first quarter [1] Financial Performance - Micron's fiscal first-quarter earnings exceeded the Zacks Consensus Estimate by 22.3% and increased by 167% year over year [6] - Revenues rose by 56.7% year over year, surpassing the Zacks Consensus Estimate by 7.3% [6] - Revenue growth was driven by a 99.5% increase in the Cloud Memory Business Unit, a 63.2% increase in the Mobile and Client Business Unit, and a 48.5% increase in the Automotive and Embedded Business Unit [7] Market Conditions and Strategic Adjustments - The NAND flash market faced severe oversupply in late 2024 and early 2025, leading to falling prices and compressed profit margins, prompting Micron to reduce NAND wafer starts and slow technology transitions [2][3] - Despite improved conditions, potential future industry-wide events could pose risks to earnings, and management anticipates memory supply constraints affecting PC unit shipments next year [3] Future Outlook - Micron's management expects higher pricing, lower cost structures, and a favorable product mix to support gross margin expansion in the fiscal second quarter [8] - The company plans to spend approximately $20 billion in capital expenditures for fiscal 2026, with a focus on the second half of the fiscal year [9] Investment Opportunities - Investors may consider technology exchange-traded funds (ETFs) with significant Micron weightings to benefit from the company's growth while diversifying risk [4][5] - Notable ETFs include: - First Trust NASDAQ Semiconductor ETF (FTXL) with 12.91% Micron exposure, up 43.9% year to date [12] - iShares Semiconductor ETF (SOXX) with 6.87% Micron exposure, up 36.5% year to date [13] - VanEck Semiconductor ETF (SMH) with 6.88% Micron exposure, up 43.4% year to date [14] - Invesco PHLX Semiconductor ETF (SOXQ) with 6.36% Micron exposure, up 38.6% year to date [15]