Can Micron blowout memory outlook turn around AI sentiment?

Investing.com -- Mizuho analyst Joseph Wrenn said in a note Thursday that Micron’s blowout quarterly results and sharply stronger outlook could help reverse recently fragile sentiment toward AI-related stocks, following renewed concerns around data center spending.

Wrenn noted that markets were rattled after reports that Oracle’s Michigan data center project had stalled, pushing Oracle shares down 5.4% and dragging the broader SOX Index lower. Oracle later denied the report.

The analyst believes the debate is whether Micron’s first-quarter results can “finally flip the tone on recently weak AI sentiment,” noting Micron shares jumped about 9% after hours as “upbeat briefing comments piled on top of blow-out numbers.”

The firm described the performance as “operational gearing in full swing,” with utilization rates above 100% and higher average selling prices flowing directly to earnings.

Mizuho also highlighted first-quarter revenue of $13.6 billion, up 20% quarter over quarter and above both guidance and consensus, while gross margin rose to 56%. T

The second-quarter outlook was even stronger, with Micron guiding to $18.7 billion in revenue and 67% gross margin.

Mizuho stated the scale of the beat was “incredibly impressive” and driven largely by pricing, with data center customers “clearly not very price sensitive.”

According to Wrenn, Micron expects a “substantial industry supply shortage lasting beyond 2026,” prompting an increase in fiscal 2026 capital expenditure plans to $20 billion.

The firm believes the commentary points to a longer runway for memory and semiconductor equipment spending, even as higher memory costs could pressure consumer and industrial end markets.

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