CES_AI Hardware in Short Supply: Vera Rubin Drives a New Wave of Capital Rotation

Summary

Micron’s quarterly results and next-quarter guidance both exceeded market expectations, underscoring the strong momentum in the memory upcycle driven by AI and high-performance computing (HPC).

For FY2026 Q1, Micron reported revenue of USD 13.64 billion, up 57% year over year, surpassing consensus estimates of USD 12.95 billion. EPS reached USD 4.78, well above the market expectation of USD 3.95.

Looking ahead, Micron’s forward guidance was equally robust. The company expects next-quarter revenue of USD 18.3–19.1 billion, significantly higher than analysts’ consensus of USD 14.4 billion, while EPS is projected at USD 8.22–8.62, compared with market expectations of USD 4.71. Micron emphasized that industry demand remains strong, memory supply is still tight in the near term, and the current memory shortage is expected to persist beyond next year.

Commentary

Despite recent selling pressure across technology stocks, Micron’s results reinvigorated bullish sentiment toward the memory sector, driving the stock up by approximately 8% in after-hours trading and lifting broader tech shares.

We believe the current memory market is experiencing supply tightness and rising prices, primarily driven by AI server demand. In addition, major memory manufacturers such as Micron and SK hynix are gradually reallocating capacity toward higher-margin products, including high-bandwidth memory (HBM) and DDR5. During this transition, both advanced-node memory and traditional consumer memory are facing simultaneous supply constraints. Although many memory producers are expanding capacity, new fabs and lines require time to come online. As a result, near-term demand momentum is expected to remain strong, with the upcycle likely to extend through 2028.