Micron Technology Offers Rosy Prognosis Amid AI Surge
Fueled by the escalating demand for artificial intelligence devices, Micron Technology (MU.US), the preeminent U.S. manufacturer of computer memory chips, has unveiled a buoyant forecast for its performance in the current quarter.
As reported by Zhitong Finance APP, the robust appetite for artificial intelligence equipment has significantly influenced Micron Technology’s optimistic outlook. In its fourth-quarter financial report released on Tuesday, the company projected that its revenue for the opening quarter of fiscal 2026 would approximate USD 12.5 billion, thereby eclipsing analysts’ average expectation of USD 11.9 billion.
When excluding certain exceptional items, the anticipated earnings per share are expected to be around USD 3.75, markedly higher than previous forecasts of USD 3.05.
This forecast underscores Micron’s position as a notable beneficiary of the burgeoning artificial intelligence spending. Its high-bandwidth memory (HBM), a pivotal component for chips and systems integral to the development of artificial intelligence models, has emerged as one of the company’s most lucrative offerings, based in Boise, Idaho.
Micron Technology disclosed its fourth-quarter fiscal report post-market on September 23, Eastern Time. The data revealed a remarkable 46% growth in Q4 sales, reaching USD 11.3 billion and slightly surpassing analysts’ average estimate of USD 11.2 billion.
Earnings per share, excluding specific exceptional items, were reported at USD 3.03, outperforming the analysts’ average prediction of USD 2.84.
However, following an impressive escalation in stock price this year, sustaining a surprise for investors may present challenges for Micron. Following the earnings announcement, shares experienced notable fluctuations during after-hours trading.
With Micron’s stock price nearly doubling within this calendar year, surpassing many competitors, this trend reflects the market’s optimistic disposition regarding the future landscape of artificial intelligence.
In a statement, Micron CEO Sanjay Mehrotra asserted, “In fiscal 2025, our data center business attained historic heights. As we transition into fiscal 2026, we retain vigorous momentum and possess a highly competitive product portfolio.
As the sole U.S.-based memory manufacturer, Micron is uniquely poised to capitalize on the forthcoming opportunities driven by artificial intelligence.”
Challenges within the memory chip supply chain are projected to persist into the forthcoming year. The relentless growth in demand for data center equipment is straining manufacturers’ capabilities to fulfill order requirements.
Concurrently, ventures related to artificial intelligence have escalated the demand for storage chips like NAND flash memory, which constitutes Micron’s second-largest product line.
Micron cautioned investors regarding potential increases in company expenditures as a response to market expectations. In fiscal 2025, Micron allocated USD 13.8 billion towards new plants and equipment, with anticipated investments set to surpass this figure in the current fiscal year.
The company disclosed that it has secured pricing agreements for the majority of its HBM3e-type memory chips slated for 2026 and has commenced the provision of samples for the next-generation chip, HBM4. Micron anticipates that executing sales of these products through fixed contracts will facilitate stable revenue streams.
Manish Bhatia, Micron’s head of global operations, stated in an interview shortly after the earnings announcement that the organization is steadfast in its focus on enhancing profitability, considering it paramount over merely augmenting market share.
Bhatia highlighted a resurgence in demand for memory chips from the personal computer and smartphone sectors, noting that these domains had previously lagged behind data center operators in embracing artificial intelligence technologies, though this trend is now evolving.
He elaborated that the manufacturing process for HBM is notably intricate, leading to extended equipment occupancy durations at factories compared to other chip types. This factor constrains the overall supply augmentation of HBM, thereby sustaining favorable market dynamics.
The memory chip sector has historically been characterized by cyclical boom-and-bust patterns along with considerable price volatility.
Micron and its South Korean counterpart SK Hynix Inc. have made significant strides in challenging Samsung Electronics Co.’s market leadership. Both entities have promptly introduced the latest iterations of HBM memory, aligning closely with NVIDIA’s (NVDA.US) AI processors.
Officials at Micron expressed confidence on Tuesday that the company’s new products, alongside upcoming next-generation offerings, are instrumental in securing a competitive edge.
Analysts are increasingly optimistic regarding Micron’s growth trajectory within the data center market, enhancing favorable sentiment toward the company. On September 11, Micron stock experienced its most substantial single-day gain in a four-month period.
At that juncture, Citigroup analyst Christopher Danely upgraded Micron’s target price to $175 and remarked that the company’s guidance following its earnings report would “significantly exceed market expectations.”
Danely highlighted that Micron is currently reaping the benefits of unexpectedly robust market demand, with demand now outstripping supply, particularly in the data center sector, which constitutes over half of Micron’s revenue.
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