Micron Technology: Benefits from the AI Boom and Exceeds Expectations

Micron Technology, the largest U.S. manufacturer of computer memory chips, has issued an optimistic forecast for the current quarter, primarily due to the increasing demand for artificial intelligence (AI). The company expects revenues of approximately $12.5 billion, significantly higher than the average analyst estimate of $11.9 billion. The adjusted earnings per share are expected to be $3.75, surpassing the expectations of $3.05. This positive outlook underscores Micron's position as a primary beneficiary of AI expenditure. The high-speed memory (HBM) produced by Micron is crucial for the development of AI models, placing the company in a lucrative position. Although the stock has already risen sharply this year, the tight supply situation in the memory chip market persists. Micron CEO Sanjay Mehrotra emphasized that the company is entering the new fiscal year with a highly competitive portfolio. Micron also plans to further increase investments in new facilities and technologies to meet the rising market strength. Micron has already reached pricing agreements for the majority of its HBM3e chips that it can produce in 2026 and is already offering samples of the subsequent generation, HBM4. These products are to be distributed through fixed contracts to ensure stable revenues. The demand for memory chips, particularly in data centers, remains high, benefiting Micron since the AI boom. The current focus is more on profitability rather than market expansion, as explained by Manish Bhatia, head of global operations at Micron. He also observes growing demand in the PC and phone sectors, after these areas lagged behind data centers in adopting AI. Micron has gained market share against Samsung Electronics, particularly through the faster introduction of new memory chip generations, which closely work with Nvidia's AI processors. Citigroup analyst Christopher Danely also projected further growth potential for Micron in September, particularly in the data center sector.