GoKawiilThe world's top memory chip makers made plenty of headlines this week, capped by Micron delivering one of the strongest earnings reports of this artificial intelligence cycle.
Micron posted revenue and earnings miles ahead of already high expectations, and guidance pointing to roughly 80% gross margins next quarter. And yet the stock sank.
The market reaction was similar to Nvidia's earnings at the end of February, and if a blockbuster print can't please traders, then what will?
In Micron's case, the debate isn't about whether demand is real. It's about how long these unusually strong profits can last, and what that means for the rest of the chip space.
"Memory today is very tight supply and supply cannot be brought up that easily, and you are seeing that in our results," Micron CEO Sanjay Mehrotra told CNBC's "Money Movers" on Thursday. "You are seeing the value of memory reflected in our strong financial performance in Q2."
On the call with analysts on Wednesday, Mehrotra and his team said key customers are only getting half to two-thirds of the memory they want. They also highlighted the company's first five-year strategic customer agreement — a big shift from the one-year deals this industry is used to.