Micron Technology has projected higher revenue for its fiscal third quarter (Q3 FY25), surpassing Wall Street estimates. The company attributes this growth to sustained demand for its high-bandwidth memory (HBM) chips, which are used in AI applications.
The semiconductor manufacturer expects third-quarter revenue of $8.8bn, plus or minus $200m, surpassing analysts’ estimates of $8.5bn. The forecast follows a 38% year-over-year increase in second-quarter revenue to $8.05bn, reflecting the growing adoption of AI-driven memory solutions. The increasing demand for Micron’s HBM chips, which are used in advanced computing models, including Nvidia’s processors, has contributed to the company’s revenue growth in AI-related markets.
For the third quarter, Micron projects adjusted earnings per share between $1.47 and $1.67. The company anticipates continued DRAM and NAND shipment growth, driven by AI adoption and infrastructure expansion.
“Micron delivered fiscal Q2 EPS above guidance and data centre revenue tripled from a year ago,” said Micron president and CEO Sanjay Mehrotra. “We are extending our technology leadership with the launch of our 1-gamma DRAM node. We expect record quarterly revenue in fiscal Q3, with DRAM and NAND demand growth in both data centre and consumer-oriented markets, and we are on track for record revenue and significantly improved profitability in fiscal 2025.”
Shares of Micron rose 5% in extended trading on Thursday, following the earnings announcement, bringing its year-to-date gains to 22%.
According to Micron, expanding AI applications in data centres have significantly increased demand for high-performance memory solutions. The company reported that its HBM shipments exceeded expectations, contributing more than $1bn in quarterly revenue. Additionally, its low-power DRAM products have gained traction in AI server deployments, reinforcing its presence in next-generation computing infrastructure.
Micron expects AI-related investments to continue driving higher memory requirements in data centres and computing applications. The company also anticipates supply constraints at the leading edge of memory production, which could tighten availability and impact pricing trends.
Financial performance and market positioning
Micron reported adjusted net income of $1.78bn, or $1.56 per share, for the second quarter (Q2 FY25) ended 27 February 2025, outpacing estimates of $1.42 per share. The company’s operating cash flow increased to $3.94bn, with capital expenditures reaching $3.09bn.
Revenue from the Compute and Networking business unit, which includes AI-focused memory products, rose to $4.6bn, marking a 109% increase year-over-year. In contrast, the Storage business unit recorded a sequential decline, reflecting a temporary pullback in storage-related investments following strong growth in previous quarters.
Micron is investing in expanding HBM production capacity to meet growing demand. The company has commenced construction on an advanced packaging facility in Singapore, aimed at enhancing manufacturing capabilities from 2027. Additionally, its new DRAM fabrication plant in Idaho, US has achieved a key construction milestone, securing funding from the CHIPS Act.
Amid evolving trade policies, Micron is monitoring potential new US tariffs on imports from China, Canada, and Mexico. While the impact remains uncertain, the company has indicated that any additional costs will be passed on to customers if necessary.
Read more: Micron shares plunge amid weak outlook despite solid Q1 FY25 earnings
