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

Micron Technology has forecasted quarterly revenue exceeding market estimates and a rise in customer commitments of $32 billion under long-term supply agreements, indicating persistent demand for AI memory chips. This optimism has driven Micron's stock to more than triple this year, earning a $1 trillion valuation in May. The surge in generative AI has made high-bandwidth memory crucial for data centers, benefiting companies like Micron, a major supplier to Nvidia.

CEO Sanjay Mehrotra revealed that customers have substantially increased their financial commitments under long-term agreements, raising the total to $32 billion from $22 billion reported in June. The CEO anticipates tighter memory and storage supply and demand conditions in fiscal 2027 and 2028 compared to 2026. Micron President and COO Manish Bhatia highlighted memory as the main constraint in AI, with data centers now being the largest market for memory and storage.

The demand for AI has led to orders surpassing capacity, prompting Micron to invest over $250 billion in US infrastructure this year. The company is expanding its capacity globally, with new sites in Japan and the US, expecting silicon wafer output in mid-2027. Finance chief Mark Murphy noted that remaining performance obligations under agreements have risen to about $150 billion, up from $100 billion last quarter, and expects fiscal 2027 to be another record year with sequential revenue growth each quarter.

Micron anticipates first-quarter revenue of $61.5 billion, plus or minus $1.5 billion, with adjusted profit at $38.15 per share, exceeding estimates of $35.40.