Micron Beats Forecasts but Stock Falls; US Indices Mixed on AI Rally
On.cc · 2 SOURCESabout 2 hours ago2 MIN
Summary
Micron Technology, a major beneficiary of the artificial intelligence boom, delivered fourth-quarter fiscal 2026 results and first-quarter fiscal 2027 guidance that exceeded Wall Street expectations, though investor enthusiasm was tempered by broader market headwinds. The chipmaker reported adjusted operating income of $5.423 billion for the quarter ending fiscal 2026, beating the $5.149 billion consensus estimate, while adjusted earnings per share came in at $33.42 versus the $31.83 forecast. The company projected first-quarter fiscal 2027 adjusted operating income of $6.0-6.3 billion and adjusted EPS of $37.15-39.15, both above analyst estimates. However, Micron shares fell nearly 3% in early trading, reflecting profit-taking after recent gains and broader market weakness.
Key Points
- Micron reported Q4 adjusted operating income of $5.423 billion and adjusted EPS of $33.42, beating market expectations of $5.149 billion and $31.83 respectively
- Q4 operating cash flow reached $439.7 billion, far exceeding the market forecast of $338 billion
- The company guides for Q1 FY2027 adjusted operating income of $6.0-6.3 billion with adjusted EPS of $37.15-39.15
- Micron plans to raise fiscal 2027 capital expenditure above prior expectations, with Q1 capex projected at $11.5 billion
- The Dow Jones Industrial Average fell 225 points to 50,681, while the Nasdaq declined 36 points to 26,825
- The 10-year US Treasury yield climbed to 5.342%, up 5.3 basis points, reflecting persistent inflation concerns
- Alphabet shares initially rose 2.8% on the Gemini 4 Argon AI model announcement before reversing to losses
- Nvidia and Microsoft each gained approximately 1%, while Micron gave up early gains to trade down over 1%
Why It Matters
Tracie McMillion, global asset allocation strategy head at Wells Fargo Investment Institute, noted that while high bond yields and oil prices continue to pose challenges, corporate earnings remain resilient. The critical question for markets is whether this earnings momentum can persist amid elevated borrowing costs. Micron's results underscore robust demand for advanced memory chips in AI infrastructure, positioning the semiconductor sector as a key bellwether for technology spending.
Tracie McMillion, global asset allocation strategy head at Wells Fargo Investment Institute, noted that while high bond yields and oil prices continue to pose challenges, corporate earnings remain resilient. The critical question for markets is whether this earnings momentum can persist amid elevated borrowing costs. Micron's results underscore robust demand for advanced memory chips in AI infrastructure, positioning the semiconductor sector as a key bellwether for technology spending.