Micron posts record $28.2 billion profit as AI chip demand drives market cap to $1.2 trillion

Micron Technology, the largest US computer-memory chip maker, has reported a dramatic surge in profitability for the third quarter, driven by intense demand from the artificial intelligence sector and a persistent global shortage of memory products. The Idaho-based company announced revenue of $41.45 billion, a fourfold increase compared to the same period a year ago, while net profit jumped from $1.88 billion to $28.2 billion.

Following the earnings release after markets closed on Wednesday, Micron’s shares rose more than 13 per cent, closing at $1,048.51. The rally has pushed the company’s market capitalisation to approximately $1.2 trillion, a significant escalation from its valuation of around $91 billion when shares traded near $83 in early 2024.

The financial results coincide with broader industry pressures, as the AI boom has created a severe crunch for memory chips essential for compute-hungry models. Predictions suggest this supply constraint could persist through 2027. The rising costs are already impacting the wider electronics landscape, with Apple CEO Tim Cook recently warning that price increases for consumer devices are unavoidable due to component cost inflation.

In a move underscoring its strategic position in the market, Micron announced a supply agreement to provide memory and storage chips to AI lab Anthropic. The company also disclosed participation in Anthropic’s Series H funding round, although it did not disclose the specific amount invested in the round.

Looking ahead, Micron provided a positive outlook for the remainder of the year, forecasting fourth-quarter revenue between $49 billion and $51 billion. The strong guidance reflects the company’s ability to capitalise on the current supply-demand imbalance, which has favoured established producers with robust manufacturing capabilities amidst the volatile semiconductor landscape.