Newsletter
Micron shares surged after the memory chipmaker reported blockbuster third-quarter earnings. And the reason? 3, 2, 1... yes, the AI boom.
What's happening: the surge pushed Micron's market value above Meta and Tesla. Other memory chip companies rallied too. Sandisk jumped 21%, while Western Digital gained nearly 5%.
So, the numbers. Micron's revenue soared from $9.3 billion a year ago to $41.46 billion in the latest quarter, beating analyst expectations of nearly $36 billion, according to LSEG.
The company is now forecasting revenue of about $50 billion for the current quarter, up from $11.3 billion a year earlier.
What’s driving this: Micron has been one of the biggest beneficiaries of the AI infrastructure boom. As companies build massive AI data centres, they need huge amounts of memory chips. That has tightened supply for smartphones, PCs and other electronic devices, pushing memory prices higher and boosting Micron's earnings.
But there's another side to this story.
The same memory shortage that's helping Micron is making life harder for companies like Apple.
Apple recently raised prices on several Macs and iPads, with some models becoming $100 to $300 more expensive. While the company didn't directly blame memory costs, the global chip squeeze has made key components more expensive. iPhone prices, however, remain unchanged for now.
In a way, Micron's earnings explain Apple's price hikes.
Investors are rewarding Micron because the AI boom has shifted pricing power back to memory chip suppliers. For Apple, that means higher manufacturing costs. And for consumers, it means paying more for some devices.
Micron didn't create Apple's pricing problem. But its latest results show that the cost of the AI boom is no longer limited to chipmakers. It's slowly making its way into the products we buy every day.
