Investors Pivot to Defense and Space After Micron's $41.46 Billion Q3 Beat

3 articles · Updated · 24/7 Wall St. · Jun 25

Micron’s blowout fiscal Q3 — $41.46 billion in revenue, $25.11 non-GAAP EPS and 84.6% gross margin — pushed chip shares higher, but strategists said the more attractive next trade is shifting toward defense and space.
That rotation reflects concern the AI memory boom is already heavily priced: Micron guided Q4 revenue to $50 billion and 86% gross margin, yet its shares are already up 267.54% this year and 721.72% over 12 months.
Defense bulls are pointing to the FY2027 U.S. budget request for $756.8 billion in investment spending, up 42%, including $18 billion for Golden Dome and replenishment of Patriot, THAAD and SM-3/SM-6 inventories.
Lockheed Martin, BWX Technologies and Rocket Lab are emerging as key beneficiaries, with Lockheed scaling missile production, BWXT carrying an $8.65 billion backlog, and Rocket Lab tied to the Space Based Interceptor program.
Rate expectations remain the wildcard: if cuts arrive, financing for defense and space programs gets easier; if not, Micron still must justify an 86% gross-margin outlook.

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24/7 Wall St.23h ago

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AOL23h ago

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6 Sources

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AI Supercycle Drives Micron’s $41.5B Q3 Blowout, Ignites Defense & Space Investment Boom in 2026

Overview

Micron Technology delivered a remarkable fiscal Q3 2026 earnings report, with results that far exceeded Wall Street’s expectations for both profit and revenue. This strong performance was driven by record revenue of $41.46 billion and robust net income, fueled primarily by soaring demand for high-performance memory solutions needed for AI applications. The market responded swiftly, sending Micron’s shares sharply higher in after-hours trading. This quarter highlights how the accelerating AI-driven memory supercycle is propelling Micron to new heights, underscoring the company’s leading position in the rapidly evolving technology landscape.

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