Micron Technology posted strong quarterly results this week, driven by booming demand for AI-related memory chips, but the company’s stock slipped as investors focused on sharply higher capital spending plans needed to keep up with that demand.
For its fiscal second quarter ended Feb. 26, Micron reported revenue of $23.86 billion, up sharply from a year earlier. The company also posted strong profit growth, with results topping Wall Street expectations as demand for high-performance memory products continued to accelerate.
Micron issued a bullish outlook for the current quarter as well, forecasting another major jump in revenue and earnings. The company said it expects fiscal 2026 to be a record year for revenue, gross margin and earnings per share, underscoring how central AI demand has become to its business.
Even with those strong numbers, investors appeared more focused on what it will cost to sustain that growth. Micron said it plans to significantly increase capital spending in fiscal 2026, with further increases expected in 2027, as it works to expand clean-room space and boost DRAM capacity. Shares fell after the report as those heavy spending plans overshadowed the earnings beat.
The company also reported strong cash generation during the quarter and said it ended the period with a sizable cash and investment position. Micron’s board declared a quarterly dividend, continuing its effort to return some capital to shareholders even as spending ramps up.
The earnings report reinforced how important Micron has become to the AI buildout. The company is one of the major suppliers of high-bandwidth memory used in advanced AI systems, an area that has become one of the hottest corners of the semiconductor market.
Still, Wall Street’s reaction showed that strong AI-driven growth alone is not always enough to satisfy investors. In the current environment, markets are also watching how much it will cost companies like Micron to stay competitive in the race to supply the infrastructure behind artificial intelligence.