What Happened?
Shares of memory chips maker Micron (NYSE: MU) jumped 11.1% in the morning session after the company reported strong fourth-quarter results and provided a much better-than-expected forecast for the upcoming quarter.
The company's revenue of $13.64 billion and adjusted earnings per share of $4.78 both surpassed Wall Street's expectations. The strong results were accompanied by a significant expansion in profitability, with its operating margin increasing to 45%, up from 25% in the same quarter last year, suggesting strong pricing power. Looking ahead, Micron's guidance was particularly impressive, with its first-quarter revenue forecast of $18.7 billion coming in 29.3% above analysts' estimates. This upbeat outlook reinforced investor optimism about continued strong demand for its memory chips.
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What Is The Market Telling Us
Micron’s shares are extremely volatile and have had 37 moves greater than 5% over the last year. But moves this big are rare even for Micron and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 8 days ago when the stock gained 4.1% on the news that the Federal Reserve cut its key interest rate, boosting investor confidence across the market.
This dovish action, combined with highly accommodating signals from Chair Jerome Powell and the Federal Open Market Committee (FOMC), sent the Dow Jones Industrial Average and S&P 500 surging. The market's bullish reaction was rooted in several key takeaways from the Fed's announcement. Most significantly, the central bank confirmed it would begin expanding its balance sheet by buying short-term bonds, a move that injects critical liquidity and lowers short-term Treasury yields.
Furthermore, the Fed signaled a shift in priority by removing language that described the labor market as "remaining low," suggesting it would be more focused on supporting economic growth. While the Fed's official forecast projected only one cut for the next year, traders immediately priced in the expectation of more aggressive easing, banking on at least two rate reductions. This widespread anticipation of sustained, low borrowing costs and the virtual certainty that rate hikes would be off the table boosted corporate valuations and created powerful momentum for the equity market rally.
Micron is up 190% since the beginning of the year, and at $253.27 per share, it is trading close to its 52-week high of $263.71 from December 2025. Investors who bought $1,000 worth of Micron’s shares 5 years ago would now be looking at an investment worth $3,544.
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