Micron rally steadies AI stocks after revenue jumps 346%

Micron Technology reported a 346% jump in quarterly revenue, a result that helped calm investors after a selloff in AI and tech shares earlier in the week. The Boise, Idaho-based memory-chip maker also gave Wall Street another reason to believe demand tied to artificial intelligence remains strong, according to Fortune.

Micron reported quarterly profit of $28.2 billion, nearly 15 times the level from the same quarter a year earlier, Fortune reported. Its shares rose almost 16% in after-hours trading after the results and later closed up 15% at $1,213 a share, according to Fortune.

The reaction spread beyond Micron. Fortune reported that the company’s results pushed up futures tied to the Nasdaq and the S&P 500, helping stabilize markets after weakness in AI-related stocks.

Wedbush analyst Dan Ives said in a Wednesday note cited by Fortune that the results showed the memory and chip trade remained strong and that the AI boom was still in an early phase.

Why Micron matters to AI

Micron is one of the world’s three largest computer-memory manufacturers, alongside Samsung and SK Hynix, and Fortune reported it is the only major U.S.-based company in that group. Fortune said Micron has a market value of $1.3 trillion and more than 50,000 employees.

The company makes memory chips that help AI servers store and move data quickly. Fortune reported that high-bandwidth memory, or HBM, is built by stacking memory layers and connecting them so data can move at very high speeds.

That speed matters because large language models require processors and memory to exchange vast amounts of information quickly, Fortune reported. Micron’s HBM4 chip, released in March, was designed for Nvidia’s Vera Rubin platform, which Fortune said helps power major AI systems including ChatGPT.

William Blair analysts said in a Wednesday note cited by Fortune that Micron is one of the main beneficiaries of the AI cycle because AI is taking a larger share of global memory capacity and pushing prices and vendor profits higher.

From Boise basement to chip giant

Micron began in 1978 in the basement of a dental office in Boise, according to the Idaho Statesman account cited by Fortune. Its four founders were Ward Parkinson, Joe Parkinson, Dennis Wilson and Doug Pitman.

Ward Parkinson had studied computer design at Stanford and worked at Mostek, then a major player in DRAM memory, according to Fortune. He later started Micron with former Mostek colleagues Wilson and Pitman, while Joe Parkinson, a Boise lawyer, helped prepare the incorporation papers.

The Idaho Statesman reported that Micron’s first $300,000 came from local businesspeople and later backing from J.R. Simplot, an Idaho potato businessman. The company’s first contract was with Mostek to help design a 64K memory chip, Fortune reported.

Micron later improved that 64K DRAM design and began producing its own version in 1981, according to Fortune. The company’s early manufacturing site southeast of Boise helped produce chips used in early computers including the Commodore 64, Fortune reported.

A volatile business becomes more concentrated

Fortune reported that Micron endured severe competition in the 1980s and 1990s from Japanese chipmakers, whose low-priced memory chips led to trade complaints and helped bring about the 1986 U.S.-Japan Semiconductor Agreement. Smaller U.S. rivals including Intel and Advanced Micro Devices left the memory-chip market, while Micron stayed in it, according to Fortune.

Micron went public on Nasdaq in 1984 at $13 a share, Fortune reported. Its memory business was long viewed as cyclical because prices could swing sharply when supply outpaced customer demand.

That market has since consolidated. Fortune reported that Micron, Samsung and SK Hynix now control about 95% of global DRAM production, giving the remaining suppliers a stronger position as AI demand lifts the need for advanced memory.

This story draws on original reporting from Fortune.