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Micron just reported another strong quarter of sales and earnings growth.
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The company benefits from increasing demand for its DRAM memory.
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Micron’s stock can be volatile, but its long-term growth story is intact.
The returns of many artificial intelligence (AI) stocks have been a significant driver of the market’s gains over the past year, and one standout stock has been the data center memory company Micron Technology (NASDAQ: MU).
Micron’s shares have increased about 217% since the beginning of 2025, outpacing the S&P 500‘s 16% returns. And there are a few good reasons why it could continue marching higher in 2026 and be one of the market’s best performers next year, too.
Micron just reported its fiscal 2026 first-quarter results (ended Nov. 27, 2025), and the company proved that it can continue growing its top and bottom lines at a healthy clip. Sales rose by 56% year over year to $13.6 billion, outpacing Wall Street’s consensus estimate of $12.8 billion. And non-GAAP (generally accepted accounting principles) earnings surged 167% higher to $4.78 per share, beating analysts’ consensus estimate of $3.95.
Micron designs and manufactures memory that is used in AI data centers, with its dynamic random access memory (DRAM) and NAND flash memory being key drivers of its growth. While the memory business can be cyclical, Micron is clearly benefiting from a massive surge in AI spending.
Not only is spending on the company’s DRAM and NAND memory soaring, but rising prices for these memory products and increased demand for other products pushed Micron’s gross margins up 11 percentage points from the year-ago quarter, to 56%. That’s an impressive increase, and it’s even more notable considering that Micron’s management says they’ll substantially increase in the second quarter, too, to 67%.
Micron likely has more to look forward to in 2026, as demand for its DRAM memory — which accounts for more than half of its sales — remains high. Tech companies, including OpenAI, Alphabet, Meta Platforms, and others, require substantial amounts of this memory as they invest hundreds of billions of dollars in building AI data centers.
Data from Counterpoint Research shows that DRAM memory processor prices could double next year due to extremely high demand. This will be a boon to Micron’s memory business, as the company’s share of the DRAM market has expanded to nearly 26%, and it could continue rising next year as the company takes advantage of the elevated levels of memory demand.
