Micron gives solid forecast after AI boosts memory demand

Micron Technology Inc., the largest US maker of computer memory chips, gave an upbeat forecast for the current quarter, helped by demand for artificial intelligence equipment.

Fiscal first-quarter revenue will be roughly $12.5 billion, the company said in a statement Tuesday. Analysts had estimated $11.9 billion on average. Excluding some items, profit will be about $3.75 a share, compared with a projection of $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 artificial intelligence 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 in the statement. “As the only US-based memory manufacturer, Micron is uniquely positioned to capitalise on the AI opportunity ahead.”

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

Micron said 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 fueling 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 $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 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.

Micron remains focused on increasing its profits and is prioritising that over gaining market share, Manish Bhatia, the company’s head of global operations, said in an interview after the results.

He also sees growing demand for memory chips in the personal computer and phone industries. Those areas had lagged behind data centre operators in adopting AI, but that’s now changing, Bhatia said.

HBM is more complex to manufacture, which ties up more equipment in factories for longer than other types of chips. That’s keeping a lid on overall expansion of supply and maintaining a healthy market, he said. The memory chip market has been famous for lurching between booms and busts, with product prices swinging wildly.

Micron and South Korean competitor SK Hynix Inc. have also made gains against market leader Samsung Electronics Co. Both companies were faster to field the latest generations of HBM memory, which works in close concert with Nvidia Corp.’s AI processors.

Micron executives said Tuesday that their latest products — and forthcoming generations — are putting the US company in the lead.

Micron's bullishness had ratcheted up on Sept. 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 Inc. analyst Christopher Danely boosted his price target for Micron to $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.

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