Micron investors take profit after Q2 beat

Today’s headlines

What’s happening: Shares of Micron Technology fell in extended trading hours on Wednesday after the company released results for its fiscal second quarter.

What happened: The semiconductor company reported better-than-expected sales and earnings for the recent quarter.

Micron announced plans to increase its capital spending by $5 billion for 2026 to match surging demand for memory chips used in AI systems.

How were the results: The Boise, Idaho-based company reported high double-digit sales growth for the second quarter.

• Revenues jumped around 196% year-over-year to $23.86 billion, topping consensus estimates of $19.94 billion.
• Adjusted earnings came in at $12.20 per share, beating Wall Street expectations of $9.21 per share.

Why it matters: Micron’s operating cash flow surged to $11.90 billion, from $8.41 billion in the previous quarter and sharply higher than $3.94 billion in the year-ago period. The company recorded adjusted free cash flow of $6.9 billion in the second quarter.

“Micron set new records across revenue, gross margin, EPS and free cash flow in fiscal Q2, driven by a strong demand environment, tight industry supply and our strong execution, and we expect significant records again in fiscal Q3,” CEO Sanjay Mehrotra said.

Micron indicated that it is looking to spend more than $25 billion during the fiscal year and aims to increase spending even further in 2027. This is due to higher construction-related expenses, as the company expands its manufacturing facilities to cater to a surge in demand.

Micron’s chief business officer Sumit Sadana said that the company recently acquired a fabrication site from Taiwan’s Powerchip Semiconductor Manufacturing for $1.8 billion, which has sent spending higher for 2026.

Micron’s board declared a quarterly dividend of 15 cents per share, representing a 30% hike.

Management guided to third-quarter revenue of $33.5 billion, plus or minus $750 million, higher than market estimates of $23.8 billion. The company projected adjusted earnings of $19.15 per share, plus or minus 40 cents, above market expectations of $11.70.

How shares responded: Micron’s shares fell 4.4% to $441.28 in after-hours trading following the release of quarterly results on Wednesday. The stock has jumped more than 46% year to date.

What to watch: Investors will keep an eye on rising demand for chips used in AI systems, which is expected to drive the company’s results ahead.

The markets today

The euro in focus today ahead of the European Central Bank’s interest rate decision

Context: The EUR/USD forex pair rose this morning as investors continued monitoring the ongoing conflict in the Middle East.

Details: On Wednesday, Israel struck Iran’s Asaluyeh refinery and the South Pars gas field, while Iran warned of retaliation against oil and gas sites in neighbouring nations.

Data released on Wednesday showed that the Eurozone’s annual inflation rate rose to 1.9% in February from January’s 16-month low of 1.7%. This was triggered by an acceleration in services inflation, which rose to 3.4% from 3.2% and a surge in non-energy industrial goods inflation, which accelerated to 0.7% from 0.4%. Core inflation also rose to 2.4% from January’s reading of 2.2%.

Weakness in the US dollar also lent support to the EUR/USD pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell 0.1% to 100.02 this morning.

The EUR/USD forex pair rose 0.3% to 1.1490 this morning, while the EUR/GBP pair added around 0.1% to 0.8644.

What to watch: Investors await the ECB’s interest rate decision (1715 UAE Time) today. The ECB is expected to keep rates unchanged for the sixth consecutive meeting, maintaining a cautious view amid rising Middle East tensions and continuous inflation risks.

Data on Eurozone’s construction output (1400 UAE Time), labour cost index (1400 UAE Time) and wage growth (1400 UAE Time) will also be released today. Construction output in the Eurozone, which fell 0.9% year-over-year in December, is expected to decline by 0.2% in January. Analysts expect hourly labour costs in the Eurozone to rise by 3% year-over-year in the fourth quarter, slowing from 3.3% in the third quarter, while wages across the Eurozone are expected to rise by 2.8% year-over-year in the fourth quarter, down from 3.0% in the third quarter.

Other Markets: US trading indices closed lower on Wednesday, with the Dow Jones index, S&P 500 and Nasdaq 100 down by 1.63%, 1.36% and 1.43%, respectively.

The news shaping the markets

Ukraine’s general staff said its military hit two Russian sites manufacturing and repairing military transport planes in the Ulyanovsk and Novgorod regions. The news sent the USD/RUB pair higher in forex trading this morning.

Australia’s employment surged 48,900 to a new high of 14.75 million in February, up from 26,000 growth in the previous month. The latest reading topping market estimates of a 20,300 gain lent support to the AUD/USD forex pair.

New Zealand’s economy grew by 1.3% year-over-year in the fourth quarter. This being the second straight quarter of growth sent the NZD/USD pair higher in forex trading this morning.

Brazil’s central bank slashed its benchmark rate to 14.75% at its latest meeting, lending support to the USD/BRL forex pair.

Argentina’s unemployment rate surged to 7.5% in the fourth quarter from 6.6% in the previous period, which sent the USD/ARS pair higher in forex trading this morning.

What else to watch today

South Africa’s building permits (1500 UAE Time), UK’s interest rate decision (1600 UAE Time), US building permits (1600 UAE Time), initial jobless claims (1630 UAE Time), Philadelphia Fed manufacturing index (1630 UAE Time), continuing jobless claims (1630 UAE Time), new home sales (1800 UAE Time), wholesale inventories (1800 UAE Time) and EIA natural gas stocks change (1830 UAE Time) as well as Argentina’s consumer confidence (1900 UAE Time) and balance of trade (2300 UAE Time).