Micron's earnings report ignited the market! How can a single earnings report reverse the pessimistic expectations for AI?

Micron's earnings report last Thursday was undoubtedly a key turning point in the recent U.S. stock market. The doubts about an AI bubble and weak industry demand that had been hanging over the market seemed to have been swept away by this report—Nasdaq futures rose in pre-market trading, the AI industry chain rebounded, and even Oracle, which had recently been caught in an order controversy, followed suit. As an investor who has long focused on Hong Kong and U.S. tech stocks, I’d like to discuss the truly noteworthy aspects of this earnings report and its potential impact on the market and related sectors.
First, the core data in this report can be said to have comprehensively exceeded expectations. In the first fiscal quarter ending November 27, Micron's revenue reached $13.643 billion, a year-on-year increase of about 57%; net profit surged to $5.240 billion, a year-on-year increase of over 180%. What excited the market even more was its outlook for the next quarter: revenue is expected to be between $18.3 billion and $19.1 billion, far above the previous market expectation of $14.4 billion; earnings per share guidance was also significantly raised to $8.22–$8.62, well above the forecast of $4.71. In the current volatile environment, such a performance—"beating expectations this quarter and even more optimistic about the future"—is indeed rare.
However, beyond the numbers themselves, Micron’s greater significance lies in confirming one thing for the market: AI demand is real and quite strong. Previously, with news of Oracle’s delayed orders and Broadcom’s fluctuating performance, many investors began to wonder whether corporate investment in AI was just a passing trend. Micron responded with actual order data: AI-related demand is not only real but could even be described as "supply falling short of demand."
As a critical component of AI computing power, Micron’s high-bandwidth memory (HBM) is essential hardware for training AI models. The company explicitly stated in its earnings report that HBM capacity is fully booked, with even 2026 allocations sold out. More strikingly, Micron can currently meet only about 50% to two-thirds of key customers’ demand, and its CEO openly expressed regret over "being unable to fully fulfill orders." In the words of management, this level of supply-demand imbalance is the most pronounced they’ve seen in over two decades in the industry. This also debunks the so-called "AI bubble theory"—if demand were illusory, how could capacity be snapped up to such an extent?
Next, let’s look at the ripple effects of this earnings report, which may be more instructive for investors.
First, the clear improvement in market sentiment has injected confidence into the Nasdaq. Earlier this week, the market was still worried about delayed rate-cut expectations and the pressure on liquidity from the yen’s rate hike, with the Nasdaq briefly falling nearly 2%. After Micron’s earnings release, sentiment quickly reversed, with Nasdaq futures rising nearly 0.8% in pre-market trading, and the overall market mood shifted from defensive to positive. After all, Micron’s pivotal position in the memory chip sector means its recovery also reflects the resilience of the tech industry’s fundamentals.
Second, the entire AI industry chain has been lifted, showing a "breakthrough at one point, response across the board" trend. The most direct beneficiaries are, of course, the memory chip sector—Micron’s own shares surged about 10% in pre-market trading, also boosting peers like Samsung and SK Hynix. Looking upstream, Micron announced it would raise capital expenditures for the fiscal year to $20 billion and accelerate factory construction—a new plant in Idaho is expected to begin production in 2027, while the New York facility is slated to start supplying in 2030. This translates to tangible orders for semiconductor equipment companies, with Applied Materials, ASML, and others benefiting indirectly.
Some downstream companies that had been under pressure due to order issues also got a boost. For example, Oracle, which had been questioned by the market over delayed orders, saw its approval process for related projects seemingly speed up after Micron confirmed strong data center demand, with its shares rising significantly in pre-market trading. The logic here is clear: Micron’s full capacity indicates that downstream data center construction is still progressing, and the earlier delays were likely just a phase of adjustment rather than a disappearance of demand.
Moreover, this optimistic signal has spread to the broader tech growth sector, further solidifying AI as the dominant theme. Beyond chip and data center companies directly involved, core AI players like Nvidia, Google, and Microsoft will also benefit indirectly. Micron’s performance validates the reality of AI computing power demand, and these companies are key to deploying and applying that computing power. For instance, Nvidia’s GPUs are typically paired with Micron’s HBM, so strong HBM demand also implies robust GPU demand—which explains why Nvidia’s long-term logic remains widely accepted despite recent pullbacks.
Finally, here are a few personal market observations, incorporating some industry views.
First, the market’s focus has gradually shifted from "whether there’s an AI bubble" to "which parts of the AI supply chain truly benefit from supply-demand imbalances." Micron’s example shows that in the AI race, segments with solid demand and capacity barriers—such as HBM, high-end memory chips, and semiconductor equipment—may offer stronger certainty.
Second, don’t overreact to short-term order fluctuations. Earlier concerns about Oracle’s delayed orders now appear to reflect the company’s own pacing adjustments rather than a collapse in demand. When investing in tech stocks, especially in long-term trends like AI, it’s more important to focus on the big picture rather than isolated events. Micron’s report also reminds us that companies’ forward guidance and capacity plans often reflect trends better than single-quarter numbers.
Third, the U.S. stock market’s main theme will likely continue to revolve around AI, but internal divergence will intensify. Companies with solid earnings and the ability to benefit from supply-demand dynamics may keep rising, while those driven by hype alone and lacking real orders could remain sidelined. For ordinary investors, rather than obsessing over index movements, it’s better to focus on fundamentally sound companies in niche sectors—following real demand is always safer.
For me, I prioritize signals of certainty, such as HBM3E sampling progress and memory price increases, and I spread my position-building over three stages to reduce the risk of missing out. When reviewing earnings, I also focus on three hard metrics: gross margin and guidance, data center business share, and HBM outlook. I add positions only if all three are met; if any one falls short, I cut decisively. My current strategy is half rolling and half locked positions—this way, I can secure some profits while staying exposed to follow-up gains.
I’ve also set three profit-taking tiers: the first, triggered when shares rise over 10% post-earnings (already hit, with 20% of the position trimmed to lock in some gains); the second, awaiting HBM4 shipment news (likely Q2 2026), when I’ll decide how much to reduce; and the third, if memory price growth narrows to under 5% quarter-on-quarter—a likely sign of peak industry momentum—when I’ll consider significant cuts.
As for keeping a core position, Micron’s management has clearly stated that supply-demand imbalances will persist beyond late 2026. This memory cycle is longer than the usual 8–10 quarters, and we’re only halfway through—no need to exit entirely. Keeping a core position lets me ride future growth without missing the main rally due to frequent trading.
I’ve also hedged some risks with small option positions against geopolitical risks, given Micron’s data center exposure to tariffs and export restrictions. A little hedging brings peace of mind. Past mistakes also remind everyone: don’t blindly chase revenue growth—focus on business structure—and don’t blindly trust low valuations. Confirm the growth logic before discussing value to avoid value traps.
In summary, Micron’s earnings report isn’t just a highlight for the company but 更像是对整个 AI 产业链的一次 “压力测试”。它让我们看到，AI 并非虚幻的概念，而是一场正在深刻重塑科技行业的真实浪潮。接下来，沿着美光所揭示的供需线索去寻找机会，或许是一个值得考虑的方向。
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