Chip stocks surged on Wednesday, adding over $400 billion in market value, fueled by optimistic forecasts from Micron Technology and Qualcomm. According to reports from Reuters, this renewed wave of optimism swept through semiconductor stocks after upbeat forecasts from the two companies reignited confidence in the artificial intelligence trade. The positive sentiment boosted rivals and equipment suppliers, signaling robust demand for AI-driven hardware and infrastructure.
Micron Technology led the rally, surging nearly 20% in pre-market trading after delivering exceptional Q3 FY2026 results that significantly exceeded market expectations. As reported by The Financial Express, the company's stronger-than-expected outlook reflects robust demand for memory chips as technology firms continue investing heavily in AI infrastructure and next-generation data centers. The memory storage company's strong performance highlighted the continued demand for AI-related hardware components.
On Thursday, Micron Technology achieved a historic milestone by edging past Meta Platforms and Tesla in market valuation, with shares trading up 18.4% at $1,236, giving it a market capitalization of $1.398 trillion, compared with Meta's $1.392 trillion and Tesla's $1.41 trillion. According to Business Standard, this briefly made Micron the third-largest company by market cap, surpassing Meta and briefly exceeding Tesla's $1.4 trillion valuation. The memory chipmaker's solid fourth-quarter revenue and profit projections helped shares reverse a recent slump, with the company disclosing its customers had committed $22 billion to lock in supplies of memory chips.
On June 25, 2026, Micron Technology released blockbuster Q3 FY2026 results that exceeded all expectations. Revenue soared to $41.46 billion (vs. ~$35.7B expected), up 346% year-over-year from $9.3 billion a year earlier, while adjusted earnings per share reached $25.11, well ahead of analysts' expectations of $20.78 per share. The company's Q4 guidance forecasts revenue of approximately $50 billion (plus or minus $1 billion), with adjusted earnings per share projected to reach around $31, significantly above analysts' consensus estimate of $25.84. Q4 gross margin is expected to be about 86%, demonstrating exceptional profitability. Net income jumped dramatically to $28.24 billion from just $1.89 billion in the year-ago quarter, while gross margins surged to almost 85%, compared to 39% a year ago. Cloud-memory revenue more than quadrupled to $13.77 billion, while sales from its core data-center business jumped more than sevenfold to $11.5 billion. The company also generated more than $5 billion in revenue from data-center solid-state drives.
The most significant development was Micron's disclosure of 16 long-term strategic customer agreements (SCAs) covering about 20% of DRAM and one-third of NAND shipments. These are take-or-pay contracts with 14 agreements securing roughly $100 billion in guaranteed future revenue and $22 billion in customer performance assurances. CEO Sanjay Mehrotra told analysts there was "no line of sight" to when supply would catch up with demand, with shortages expected to persist well beyond 2027. 14 of these agreements currently correspond to guaranteed revenue of approximately $100 billion, with customers providing about $22 billion in performance guarantees, including roughly $18 billion in cash form for future capacity construction and R&D investment. The company revealed that remaining contracted revenue obligations now stand at $100 billion, giving investors valuable insight into future revenue visibility and suggesting that customers are willing to lock in supply years in advance. As reported by The Financial Express, "When completed, we expect approximately half or more of our company revenue to be under these" strategic customer agreements, with the deals including binding commitments from customers to buy specific volumes of Micron products.
The earnings sparked a broad rally across semiconductor and storage stocks, with the Philadelphia Semiconductor Index rising 3.2% on Thursday and remaining on track for its strongest quarterly performance on record. According to LSEG data, among peers, Sandisk jumped 22%, Western Digital gained 7.4%, and Seagate Technology advanced 4.3%, while Qualcomm climbed after outlining ambitious growth plans for its AI-focused data-centre business. Micron's stock is now up roughly 326% so far in 2026 and has climbed more than 15% since reporting earnings, having first crossed the $1 trillion market-capitalisation milestone in late May. The company became a trillion-dollar company on May 26 as enthusiasm around artificial intelligence continued to drive investment into companies supplying key technologies for the sector. Despite the rally, the broader technology sector finished mixed, with investors remaining concerned about whether escalating AI-related spending by hyperscalers is sustainable, particularly after Apple announced price increases for iPads and MacBooks to offset rising memory and storage chip costs.
