Micron Technology reported impressive revenue and earnings per share for its fiscal third quarter, prompting significant interest from analysts regarding its pricing strategy. CEO Sanjay Mehrotra emphasized the company's ability to maintain high gross margins, potentially exceeding the 84.9% achieved in the last quarter, due to ongoing global supply shortages.
He indicated that these tight supply conditions, driven by increasing demand from sectors like artificial intelligence, are expected to last well into 2027. CFO Mark Murphy supported this outlook, reinforcing expectations of a constrained market.
This positive sentiment comes in the wake of a recent sell-off in the chip sector, triggered by concerns over demand signals from competitors like SK Hynix. Micron's new customer contracts will include price floors and ceilings, allowing for significant profitability, which could further stabilize the market sentiment.
The after-hours trading response to Micron's earnings report reflects investor optimism about the company's future in a challenging market environment