Micron Technology (MU  ) shares were 8% higher in pre-market trading following strong fiscal first-quarter earnings that beat analysts' expectations for all key metrics including strong guidance. The results led to strength across the entire semiconductor industry especially as Micron's chips are considered a strong indicator of tech demand due to their products found in so many devices.

After a strong 2020, Micron has been pretty quiet in 2021 with a 9% YTD gain. It's in a similar position to a lot of other semiconductor companies in that it saw a big surge in revenue and earnings that has persisted, but the market doesn't believe these will sustain, so the company is quite cheap from a valuation perspective.

Inside the Numbers

In its fiscal Q1, Micron reported $2.04 in earnings per share which beat expectations of $2.10 per share. This was a 161% improvement from last year. Revenue also beat at $7.7 billion vs $7.68 billion and was 33% higher than last year.

While these results were impressive, more meaningful for the stock price was its margins, guidance, and positive commentary on the demand and pricing environment for memory chips.

For its next quarter, Micron is forecasting earnings per share of $1.95 and revenue of $7.5 billion Both figures are above consensus expectations of $1.84 in EPS and $7.3 billion in revenue.

One reason for Micron's underperformance this year is expectations that tech spending would slow given the acceleration last year. However, these numbers continue to be strong especially in markets like PCs and tablets.

So, Micron is benefitting as prices for chips have stabilized, supplies are tightening, and demand is once again rebounding in the second half of the year.

Another positive contributor was data center sales which is now the largest market for memory and storage chips. The company also expects this segment to continue growing faster than other parts. According to management, these sales increased by more than 70% due to cloud demand and IT spending by companies.

The company also acknowledged some supply chain issues that constrained production but believes these easing will be another tailwind. In terms of DRAM demand, it sees growth in the 15% range and about 30% growth for NAND demand.

Overall, Micron remains one of the top memory chip companies in the world. Given that many of its customers are in growth mode and dependent on these chips, Micron's outlook looks strong.