Micron reports strong earnings amid memory chip shortage

The artificial intelligence boom has fueled dozens of new startups and minted a new class of billionaires. However, it has also produced a serious shortage of memory chips—critical components for compute-hungry AI models—which could persist through 2027. Amid this competitive environment for memory chips, some companies are coming out ahead. Micron, the largest U.S. computer-memory chip maker, is one of them. This has not always been the case for the company. In early 2024, Micron’s shares were trading around $83, with a market cap of about $91 billion. Today, the company commands a market cap of $1.2 trillion, and its shares closed at $1,048.51.

The Idaho-based company reported its third-quarter earnings on Wednesday after the markets closed, and the strong results sent its shares soaring. The company’s latest financial results include:

• Revenue: Quadrupled to $41.45 billion compared with the same period a year ago.
• Profit: Rose to $28.2 billion, up from $1.88 billion in the previous year.
• Share Price: Rose more than 13% following the earnings release.

The strong quarterly results arrive the same week Micron inked a deal to supply AI lab Anthropic with memory and storage chips. This deal represents a direct supply agreement between the chipmaker and the AI lab. Micron also disclosed that it participated in Anthropic’s Series H funding round—which is a late-stage funding round—though the chipmaker did not disclose how much it invested in the startup.

Looking forward, Micron gave investors a positive outlook, forecasting fourth-quarter revenue of between $49 billion and $51 billion. However, the broader industry continues to face a memory chip shortage, colloquially referred to as “RAMageddon,” which could persist through 2027. This shortage continues to affect the supply chain for hardware manufacturers.

This era of RAMageddon is not just a corporate problem. As demand spikes and squeezes supply, prices are rising and trickling down to consumers. This has direct implications for consumer electronics companies and their customers. Just a week ago, Apple CEO Tim Cook warned that price increases for its products are unavoidable.

Why it matters

Micron’s ability to capitalize on the AI-driven memory demand highlights a divergence in the market, where chip suppliers are thriving while consumer electronics companies face rising costs.