The chip maker has been a victim of souring AI sentiment lately, but its upbeat outlook has Wall Street feeling better about the path forward.

Shares of Micron Technology Inc., the largest US maker of computer memory chips, rose by the most in eight months after the company gave an upbeat forecast for the current quarter, signaling that surging demand and supply shortages are allowing the company to charge more for products.

Wall Street praised Micron's stellar Q1 earnings. Morgan Stanley said the results were among the biggest surprises in the history of the chip sector.

Micron Technology forecast second-quarter adjusted profit at nearly double what Wall Street analysts expected on Wednesday, as prices soar for memory chips amid tight supplies and booming demand from artificial intelligence data centers.

Micron Technology Inc (NASDAQ:MU) reports earnings for the first quarter of fiscal 2026 after the bell on Wednesday.

Micron is one of the best AI stocks to hold as the artificial intelligence revolution continues its data buildout. Click here to see our MU earnings deep dive.

Micron Technology shares rose nearly 16% on Thursday, following an outsized profit forecast on the back of a worldwide supply crunch of memory chips amid robust demand from AI data centres.

U.S. stocks are rising following an encouraging report on inflation that could help the Federal Reserve keep cutting interest rates next year.

Micron, one of the three biggest memory suppliers in the world, forecasts rough months ahead for the global RAM supply. As part of its earnings report released on Wednesday, Micron CEO Sanjay Mehrotra said “tight industry conditions” across DRAM and NAND flash memory are expected to “persist through and beyond” 2026 as AI drives up demand.

Micron’s high bandwidth memory (HBM) chips — a type of DRAM, or dynamic random access memory — are a crucial part of AI server systems, storing data temporarily and rapidly feeding it to GPUs (graphics processing units) as they train and run AI models. The company is a major supplier of memory to AI chip giant Nvidia ( NVDA ).

The AI gold rush is creating shortages for memory chips that could raise prices for all sorts of gadgets.

Micron Technology Inc. kicked off its biggest single-day stock gain in more than eight months after delivering an upbeat forecast for the current quarter, signaling that surging demand and supply shortages are allowing the memory-chip maker to charge more for products.