Nvidia, AMD and Intel rise on Micron earnings, so why is MU stock falling?

by Girls Rock Investing
Analysts and traders looking at market charts

Nvidia, AMD and Intel stocks moved higher before Thursday’s opening bell after Micron Technology delivered an earnings beat, reinforcing confidence that the AI infrastructure boom remains intact.

Micron itself moved the other way. The stock slipped about 1% in premarket trading despite reporting fiscal fourth-quarter revenue of $54.23 billion, adjusted earnings of $33.42 a share and guiding for roughly $61.5 billion of revenue this quarter.

Nvidia and AMD gained about 1%, while Intel also rose.

Micron gives the wider AI trade another demand signal

Financial commitments under long-term supply agreements rose to $32 billion from $22 billion in June, while management said memory supply could remain constrained through fiscal 2027 and 2028.

That matters for Nvidia, AMD and other AI-linked companies because high-bandwidth memory and DRAM are essential components of modern accelerators and servers.

D.A. Davidson’s Gil Luria told Yahoo Finance after the results that Micron’s performance was “a good indication for the whole data center build-out ecosystem”, because demand remained powerful even after expectations had risen sharply.

Ahead of the report, Luria noted that industry participants consistently said they did not have nearly enough memory.

Micron’s quarter is therefore more than a company-specific earnings report.

It is evidence that hyperscalers and data-centre operators are still spending aggressively enough to keep critical components scarce.

Micron’s problem is that excellent was already expected

For Micron shareholders, the same numbers face a higher bar.

The shares had climbed roughly 280% in 2026 heading into earnings, turning extraordinary growth from a surprise into the central investment thesis.

Revenue beat consensus, adjusted earnings topped forecasts and the current-quarter sales outlook exceeded Wall Street expectations.

Deutsche Bank analyst Melissa Weathers said there was “some incremental squishiness on the margin front this quarter”, according to MarketWatch.

She maintained a Buy rating and $1,550 target but highlighted higher incentive-related costs affecting gross margins and operating expenses.

Micron reported an adjusted gross margin of 87% for the August quarter but guided to around 86.25% for November.

None of that points to weak demand, but shows how demanding the setup has become.

The US 10-year Treasury yield also climbed above 5.3% on Thursday, adding another valuation headwind as investors considered whether Micron deserved another rerating.

The bigger challenge is keeping the surprises coming

Micron is making its business more predictable through 26 strategic customer agreements, which cover more than 35% of projected revenue through 2030, with roughly three-quarters of that agreement-linked revenue governed by defined pricing frameworks.

That improves visibility and could reduce the brutal cyclicality associated with memory.

There is an irony, as more predictable revenue can also make outsized upside surprises harder to deliver.

Stifel analyst Brian Chin warned before the results that investors should expect “a more measured rate-of-upside than in recent quarters”, according to Barron’s.

He cited more revenue being covered by supply agreements and physical constraints on bit shipments.

Stifel expects DRAM shipment growth to slow to around 15% to 20% in 2027. Yet those constraints could keep prices and margins unusually high because supply remains below demand.

That is Micron’s new contradiction. Scarcity is excellent for pricing, but it also limits how many additional chips the company can sell.

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