Micron gives solid forecast after AI boosts memory demand

[SEATTLE] Micron Technology, the largest US maker of computer memory chips, gave an upbeat forecast for the current quarter, helped by demand for artificial intelligence (AI) equipment.

Fiscal first-quarter revenue will be roughly US$12.5 billion, the company said on Tuesday (Sep 23). Analysts had estimated US$11.9 billion on average. Excluding some items, profit will be about US$3.75 a share, compared with a projection of US$3.05.

The outlook validates the idea that Micron has become a key beneficiary of AI spending. Its high-bandwidth memory, or HBM, is critical to the chips and systems that develop AI models. That’s turned the technology into a particularly lucrative product for the Boise, Idaho-based company.

Still, it was hard for Micron to impress investors after an eye-popping rally this year. The stock whipsawed in late trading after the results were released. It had nearly doubled this year, rising at a faster pace than most of its peers, reflecting the AI-fuelled optimism.

“In fiscal 2025, we achieved all-time highs across our data centre business and are entering fiscal 2026 with strong momentum and our most competitive portfolio to date,” chief executive officer Sanjay Mehrotra said. “As the only US-based memory manufacturer, Micron is uniquely positioned to capitalise on the AI opportunity ahead.”

Sales rose 46 per cent to US$11.3 billion in the fiscal fourth quarter, which ended Aug 28. Analysts had estimated about US$11.2 billion. Earnings were US$3.03 a share, excluding some items, compared with an average prediction of US$2.84.

Micron said that it expects the supply of memory chips to remain tight into next year. Demand for data centre equipment is stretching the ability of companies to keep up with orders. AI-related business is also fuelling demand for storage chips, known as Nand flash, Micron’s second-biggest product line.

The company warned investors that spending will go up as it tries to respond to that market strength. The company spent US$13.8 billion on new plants and equipment in its fiscal 2025 and expects to invest more than that in the current financial year.

Micron said that it reached price agreements for most of the HBM3e-type memory chips it can make in 2026. And the company is already offering samples of the successor generation of chips, HBM4. Micron expects to sell those products in fixed contracts, helping ensure that revenue is reliable.

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Micron bullishness had ratcheted up on Sep 11, when analysts touted the chipmaker’s growth potential in the data centre market. That kicked off the biggest one-day rally for the shares in four months.

At the time, Citigroup analyst Christopher Danely boosted his price target for Micron to US$175, saying the company would “guide well above consensus” when it reports results.

Micron has benefited from higher-than-anticipated demand that is outstripping production, Danely said. That’s particularly true in the data centre area, which accounts for more than half of Micron’s revenue, he said. BLOOMBERG