Investing.com -- Micron Technology posted fiscal third-quarter results Wednesday that far exceeded Wall Street expectations, as relentless demand for artificial-intelligence hardware continued to reshape the memory-chip market.

The company’s shares jumped more than 17% in premarket trading Thursday, pushing its market capitalization above $1 trillion — capping more than 700% gain over the past year.

Revenue climbed to $41.46 billion, more than quadrupling from $9.3 billion a year earlier and well above the $35.84 billion analysts had forecast, according to LSEG. Adjusted earnings per share came in at $25.11, topping estimates of $20.78.

For the current quarter, Micron guided for revenue of approximately $50 billion, nearly five times the $11.3 billion it reported in the year-ago period, and sharply above the $43.58 billion consensus.

The company is the only U.S. manufacturer of high-bandwidth memory (HBM) chips, the specialized components that sit alongside Nvidia’s AI processors. Demand for those chips has persistently outpaced supply, enabling Micron and its rivals, South Korea’s SK Hynix and Samsung Electronics, to command premium prices.

That dynamic has cascaded across the memory market, lifting prices for chips used in smartphones, laptops, and other consumer devices as well.

Micron said it has signed 16 Strategic Customer Agreements (SCAs), or long-term supply deals, with data center operators, automakers, and other customers spanning three to five years.

"When completed, we expect approximately half or more of our company revenue to be under these" strategic customer agreements, CEO Sanjay Mehrotra said, adding that they were structured with binding agreements to purchase volumes of Micron’s chips.

The company said it expects $22 billion in financial commitments tied to those deals.

Gross margin (GM) expanded to 84.9% in the quarter, up from 74.9% the prior period and 39% a year earlier, surpassing analyst projections.

Growth was broad-based across Micron’s four business segments, but the data center unit led the way, with revenue surging more than sevenfold to $11.5 billion from $1.53 billion a year ago. The company also recorded more than $5 billion in data center solid-state drive revenue.

Cloud memory sales rose more than 300% to $13.77 billion.

What analysts are saying about Micron’s results

Bank of America: "MU delivered another strong quarter, reinforcing our constructive view on memory’s role in AI and the increasing supply-side discipline supporting a more durable cycle. While strategic customer agreements (SCAs)—now 16, up from last quarter—may modestly cap near-term pricing upside, they materially enhance visibility and reduce volatility by aligning with customers facing a rising “memory tax” (~35% of AI capex). Valuation remains compelling, with shares implying ~10% FCF yield, and we see a meaningful step-up in capital returns post the CHIPS Act anniversary in Dec. 2026."

Susquehanna: "Even at the floor, GMs would stay above prior peak quarterly of 60%. We also believe the 16 SCAs position MU to generate meaningful FCF in excess of $110B in FY27, the bulk of which should flow to shareholder returns given management’s intent to return 100% of excess cash over time. The key support is the contractual price floor: For existing products, it is fixed for the full term, and the quarterly negotiated price cannot fall below it regardless of market conditions, locking in GM well above any prior-cycle peak."

Morgan Stanley: "Good quarter/outlook, though the bigger debate is durability of these conditions and those aspects were also positive, as capex increases were modest, LTA disclosure was better than expected, though there are very clearly some tradeoffs between near term upside and durability, and execution in areas such as eSSD, HBM, and LPDDR5 SOCAMMs were all positive. We noted in our preview that the investor mindset seems to be much more that people are looking to add vs. the last two quarters where people were looking for reasons to sell, and the after hours reaction seemed consistent with that."

Raymond James: "We continue to view Micron as one of the best beneficiaries of the current memory cycle, which is increasingly becoming more structural as AI-driven demand and ongoing supply tightness continues to support pricing and margins, leading to a shift in the company’s business model through multiyear strategic agreements. We are particularly encouraged by MU’s strong execution in HBM4, following success with HBM3E last year, while the AI opportunity broadens beyond HBM into conventional DRAM and enterprise SSD.

Goldman Sachs: "We believe these agreements are a significant positive for the stock which could help increase the multiple on "peak" earnings investors are willing to pay for the stock. At the same time, the industry continues to accelerate supply additions to help satisfy customer demand - although we believe this will not be enough to drive any meaningful slack in the market until 2028 at the earliest. We remain Neutral-rated on the stock given our view of roughly balanced risk/reward at current levels, but would consider being more constructive on the stock if we see continued supply growth discipline continuing across the industry through 2028 and beyond."

Baird: "We continue to expect DRAM undersupply versus demand industry-wide in both 2027 and 2028, with DRAM production bit growth supply in the low 20s for each year. This, in combination with Micron’s SCAs (floor well above prior gross margin peak and up to C2Q pricing levels) provide gross margin and earnings visibility and stability conducive to some multiple expansion."