Why Micron is the latest AI darling — for today at least

Micron is stealing the show in the AI space — at least for now — as investors bask in its latest earnings results.

The chipmaker blew past expectations with its second-quarter financials, beating both revenue and earnings estimates on Wall Street. The firm pulled $7.75 billion worth of revenue, up 93% from last year, and above estimates of $7.65 billion. Earnings per share, meanwhile, came in at $1.18, above the expected $1.11.

That sparked some major optimism for the firm on Thursday. Though its year-to-date gains have badly lagged other AI behemoths like Nvidia, Micron shares rose as much as 20%. Its results also led a rally in other chip stocks like Nvidia, Intel, and Super Micro Computer.

Even with daily gains pared to 14% at 12:15 p.m. in New York, the company’s year-to-date return now stands at 28%. Trading volume jumped to 42.5 million mid-day Thursday, outpacing interest in other firms in the AI space, like Intel, Tesla, and Palantir.

Wall Street, meanwhile, has quickly scaled up its expectations for the chipmaker.

Rosenblatt raised its price target on the stock to $250 a share, implying 123% upside from current levels. Analysts pointed to MU’s “unambiguous” earnings beat, adding that it believed Micron was in the midst of one of the “biggest semi/memory cycles ever.”

Bank of America raised its price target for Micron to $125 a share, implying over 30% upside.

“Despite increasing macro (softer PC, phone demand) headwinds, MU was able to deliver beat/raise results on the back of solid data center demand, including continued growth in its AI-levered high-bandwidth memory (HBM) sales,” the bank’s strategists said in a note on Thursday.

“This is a long upcycle in the memory market benefitting Micron and its peers,” William Kerwin, a Morningstar tech stock analyst said, speaking to Bloomberg shortly after the earnings results. “We expect this upcycle to continue through the next four quarters through calendar 2025. So it exceeded our expectations, and we think the momentum can keep on going.”

The stock’s jump on Thursday seems to have strengthened the bull narrative for stocks. The Nasdaq Composite turned up 1%, eating back its losses from its selloff last week.

“Investors jumped on this briefest, and shallowest, of dips to load up on equities, with results from Micron Technology providing the trigger,” David Morrison, a senior market analyst at Trade Nation, wrote in a note on Wednesday. “Risk appetite feels strong, with investors more concerned by their FOMO, than being the one that ‘top-ticks’ the market.”