Micron Technology reported blowout second-quarter earnings, driven by a surge in demand for memory chips used in artificial intelligence applications. The company posted $23.86 billion in revenue for Q2 of fiscal 2026, nearly triple its $8.05 billion from the same period last year, and issued strong guidance projecting gross margins of about 80% for the next quarter [1]. Despite these robust financial results, Micron's stock has dropped around 15% since the earnings announcement last Wednesday, marking its fourth consecutive day of declines [1].
CEO Sanjay Mehrotra attributed the strong performance to tight memory supply and soaring demand from AI chipmakers such as Nvidia and Advanced Micro Devices, noting that Micron, SK Hynix, and Samsung dominate the market for these critical memory components [1]. Mehrotra stated that Micron can only deliver 50% to two-thirds of what key customers require, underscoring the severity of the supply crunch [1]. He emphasized, "Memory today is very tight supply and supply cannot be brought up that easily, and you are seeing that in our results" [1].
Despite the stock's decline, analysts responded positively to Micron's earnings. Bank of America, Morgan Stanley, and JPMorgan all raised their price targets following the report [1]. Citi's Atif Malik suggested that concerns over higher FY27 capital expenditures and peak gross margins (81%, higher than Nvidia's 75%) may have prompted profit-taking after a strong run-up in the stock ahead of the earnings release [1].
Micron remains up over 300% in the past year and is the only tech company among the U.S. top 10 to see gains year-to-date, with Oracle and Microsoft both down over 20% [1].
CONCLUSION
Micron's exceptional Q2 results and optimistic guidance highlight its pivotal role in the AI-driven memory chip market, but persistent supply shortages and profit-taking have triggered a sharp 15% stock decline. Analysts remain bullish, raising price targets despite short-term volatility. The market takeaway is that Micron's fundamentals are strong, but supply constraints and investor concerns over future margins are weighing on shares.