Sold-out chips, soaring profits: what next for Micron?

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Memory chip maker Micron Technology has been one of the big beneficiaries of the AI boom but, after a gravity-defying run which saw it become the latest name to hit a $1 trillion valuation, the shares have endured some turbulence of late.

Surging demand for advanced AI data storage chips has pushed the highly cyclical semiconductor industry into a severe shortage, which analysts expect to persist for at least the next two years.

As a result, the electronics industry has been left short of capacity, driving up DRAM (Dynamic Random-Access Memory) prices.

DRAM refers to temporary system memory. AI applications require hundreds of gigabytes of ultra-fast memory to operate effectively.

Much of this demand is for HBM (High Bandwidth Memory), a specialised form of memory that only a handful of companies, including Micron, can produce at the scale required by the AI data centre build-out.

Chips sold out amid bumper demand

In third-quarter numbers released in June 2026 Micron revealed its advanced HBM3E and HBM4 chips were completely sold out through the end of calendar 2027, with demand stretching into 2028.

Revenue for the period came in at $41.5 billion, 15.7% ahead of the consensus forecast and up 346% year-on-year, while earnings per share hit $25.11 against the $20.78 which had been pencilled in by analysts.

Despite this stellar performance, Micron shares have pulled back in the interim as investors have taken some profit, with global counterparts in the memory chip space also seeing some weakness.

 

When it puts up its fourth-quarter results on 30 September several key points are likely to be in focus. They include visibility on the timelines for the HBM chips Micron is fabricating for Nvidia’s new Vera Rubin AI architecture. 

Micron is set to earn a higher margin on these components but there are risks that capacity limits might affect the timelines on the roll-out of Vera Rubin chips.

 

Profitability in general will be in focus, with investors watching closely to see if input costs are starting to eat into Micron’s 85% gross margin. Another key area of focus will be the company’s capital expenditure plans. An increase is likely given the need to increase capacity, but the market will want reassurance that Micron is retaining some financial discipline.

 
 
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Tom Sieber

Tom Sieber: Content Editor

Tom Sieber is AJ Bell's Content Editor. He was previously the Editor of Shares Magazine. He has been with the business since 2012.

Tom is a regular contributor to the AJ Bell Money & Markets...

These articles are for information purposes and should only be used as part of your investment research. They aren't offering financial advice and past performance is not a guide to future performance, so please make sure you're comfortable with the risks before investing.