Micron shares slip as hefty spending plans eclipse strong AI-fueled earnings
· CNA · JoinRead a summary of this article on FAST.
Get bite-sized news via a new
cards interface. Give it a try.
Click here to return to FAST Tap here to return to FAST
FAST
March 19 : Micron shares fell about 5 per cent on Thursday as the chipmaker's plan to boost capital outlay unnerved investors, taking the shine off another round of blockbuster quarterly earnings fueled by AI.
Demand for advanced memory chips has soared as U.S. tech giants pour billions into AI data‑center buildouts, driving a supply crunch and pushing prices higher. That helped Micron deliver record margins in the quarter ended February.
But the company plans to increase its fiscal 2026 capital expenditure plan by $5 billion to meet booming demand, taking the total investment for the year to more than $25 billion and said spending would rise further in 2027.
The increased expenditure reflects higher spending on controlled manufacturing spaces and increased outlays for new production equipment as the company prepares for high-volume manufacturing and dynamic random‑access memory investments.
CNA Games
Guess Word
Crack the word, one row at a time
Buzzword
Create words using the given letters
Mini Sudoku
Tiny puzzle, mighty brain teaser
Mini Crossword
Small grid, big challenge
Word Search
Spot as many words as you can
Show More
Show Less
Most of the spending increase comes from expansion work at its site in Tongluo, Taiwan, with additional cost pressure arising from higher construction spending at its U.S. fabrication projects.
Construction-related spending is set to rise by more than $10 billion from a year earlier, the company said.
"Micron increased its capex forecast to continue to add production capacity. That reinforces the belief that the memory shortage is a temporary phenomenon and business will return to its commodity nature in coming years as capacity comes online," said Mike O'Rourke, chief market strategist at JonesTrading.
The chipmaker topped Wall Street expectations for the second quarter and forecast third-quarter revenue of $33.5 billion, plus or minus $750 million, compared with analysts' average estimate of $24.29 billion according to data compiled by LSEG.
Micron, whose shares have climbed more than 61 per cent this year after surging over 240 per cent in 2025, is one of only three global suppliers of high-bandwidth memory used in AI systems, along with South Korea's Samsung and SK Hynix.
Shares of other U.S. memory makers such as Western Digital and Sandisk fell about 2 per cent and 1 per cent, respectively.
Newsletter
Week in Review
Subscribe to our Chief Editor’s Week in Review
Our chief editor shares analysis and picks of the week's biggest news every Saturday.
Sign up for our newsletters
Get our pick of top stories and thought-provoking articles in your inbox
Get the CNA app
Stay updated with notifications for breaking news and our best stories
Get WhatsApp alerts
Join our channel for the top reads for the day on your preferred chat app