Micron shares dip on spending despite strong AI forecast

Micron Technology, Inc. has issued a third-quarter revenue forecast that significantly exceeds Wall Street expectations, driven by a surge in demand for memory chips essential to artificial intelligence. This optimistic outlook follows a sharp increase in second-quarter earnings as technology firms accelerate investments in data center infrastructure.

The company reported second-quarter revenue of $23.86 billion, surpassing analyst estimates of $20.07 billion. Looking ahead, the chipmaker projects third-quarter revenue to reach approximately $33.5 billion, plus or minus $750 million. In response to the strong performance, the board of directors approved a 30% increase in the company's quarterly dividend.

Despite the robust financial results, shares of the company declined by 4% in extended trading. The dip followed an announcement that the firm would increase its 2026 capital spending plan by $5 billion to keep pace with rising demand. Total spending for the current fiscal year is expected to exceed $25 billion, with potential further increases in 2027 as construction costs for new manufacturing facilities could rise by more than $10 billion from a year ago.

The global demand for advanced storage and memory is being fueled by a race to expand AI data center capacity. As one of the few providers of high-bandwidth memory, the firm is positioned alongside industry leaders in South Korea, including Samsung Electronics Co., Ltd. and SK hynix Inc..

The step-up in our results and outlook are the outcome of an increase in memory demand driven by AI, structural supply constraints and Microns strong execution across the board.

CEO Sanjay Mehrotra provided this statement in his prepared remarks, highlighting the structural supply constraints currently impacting the market. Reporting on the semiconductor sector's latest developments was provided by analysts in Mexico.