Micron surge boosts memory ETFs

Micron Technology reported third-quarter EPS of $25.11 and revenue of $41.5 billion, beating analyst estimates of $20.39 and $35.1 billion. The company raised its Q4 revenue guidance to a range of $49 billion to $51 billion, above a Wall Street projection of about $43.2 billion.

The company disclosed a multi-year agreement with AI developer Anthropic, announced the Monday before the earnings release, under which Micron will supply memory and storage chips to the AI developer.

Micron reported DRAM revenue of $31.3 billion for the quarter versus analyst expectations of $27.5 billion, a result the company linked in part to continued data center construction that is increasing demand for memory components.

Memory-focused exchange-traded funds recorded notable flows and performance following the earnings. The Roundhill Memory ETF (DRAM), launched in early April, has returned more than 150% since inception and attracted roughly $17.5 billion in inflows. The fund requires holdings to derive at least 50% of revenue from memory components and is highly concentrated: Micron represented about 24.25% of assets, Samsung Electronics about 26.49%, and SK Hynix about 24.26%, combining for approximately three-quarters of the fund.

Roundhill also offers the Roundhill T-REX 2X Long DRAM Daily Target ETF (RAM), a leveraged product designed to deliver twice the daily performance of the underlying DRAM ETF. RAM carries an expense ratio of 1.25% (125 basis points) and is intended to magnify daily returns on DRAM holdings.

The iShares MSCI USA Value Factor ETF (VLUE) listed Micron as its largest holding at 23.4% after a semiannual rebalance in May; the fund’s next-largest position is Cisco Systems at 4.7%. VLUE tracks the MSCI USA Enhanced Value Index, using a sector-neutral, fundamentals-based method to select value stocks within the MSCI USA universe and has a notable tilt toward technology names.

Micron’s reported forward price-to-earnings ratio was about 9.11, with a trailing P/E near 23.70. For comparison, Nvidia’s forward and trailing P/E ratios were approximately 22.68 and 30.47, respectively.

Funds with concentrated exposure to memory suppliers showed performance and inflows tied to Micron’s quarterly results and related industry demand figures.