Micron forecasts quarterly revenue, profit above estimates on AI memory demand

September 30: Micron Technology announced on Wednesday that its quarterly revenue and profit will exceed market expectations due to strong demand for AI memory chips. The company's stock value has surged over 300% this year, pushing it into the $1 trillion market cap range in May. Micron benefits from the AI boom, as high-bandwidth memory is crucial for data centers.

CEO Sanjay Mehrotra revealed that customers have substantially increased their financial commitments under long-term supply agreements, raising the total to $32 billion from $22 billion in June, with most payments made in cash. CEO Mehrotra predicts tighter memory and storage supply and demand conditions in fiscal 2027 and 2028 compared to 2026.

Micron President and COO Manish Bhatia noted that memory is the primary constraint in AI compared to other factors like logic and power consumption in data centers. The data center sector is now the largest market for memory and storage, with orders exceeding capacity leading Micron to invest over $250 billion in US capacity by 2035.

Bhatia mentioned that the company is expanding capacity at various locations globally, including new sites in Japan and the US, with the first silicon wafer production expected in mid-2027. Finance chief Mark Murphy stated that Micron's remaining performance obligations under supply agreements have grown to approximately $150 billion, up from $100 billion in the previous quarter, with Q1 2027 expected to be another record year with sequential revenue growth each quarter.

Micron anticipates first-quarter revenue of $61.5 billion, with adjusted profit at $38.15 per share, surpassing analysts' average estimate of $57.02 billion, according to LSEG data.