Updated Version 3 - Micron’s AI-driven revenue forecast far exceeds expectations, with order volume surging

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Anhata Rooprai

Reuters, September 30 - Micron Technology (MU.O) forecast on Wednesday that its quarterly revenue will exceed expectations, and stated that client purchase commitments under its long-term supply agreements have reached $32 billion, indicating continued strong demand for AI memory chips.

The boom in generative artificial intelligence has made high-bandwidth memory a necessity for data centers, greatly benefiting companies such as Micron—Micron is a key supplier to NVIDIA (NVDA.O), whose processors dominate computing workloads.

Micron’s order volumes have far surpassed its production capacity, prompting the company in July to announce an increase in its planned U.S. investment to over $250 billion by 2035 (link), as Amazon AMZN.O, Alphabet GOOGL.O and other technology giants are spending more than $730 billion on AI infrastructure this year.

CEO Sanjay Mehrotra announced in prepared remarks that the total financial commitments in Micron’s long-term supply agreements have increased significantly, rising from $22 billion (link) in the June report to $32 billion, with most paid in the form of cash deposits.

“We expect memory and storage supply-demand conditions in fiscal 2027 and 2028 to be even tighter than in fiscal 2026,” Mehrotra added.

Chief Financial Officer Mark Murphy said Micron’s remaining performance obligations under these agreements—a key indicator of future contracted revenue—have increased from about $100 billion reported in the previous quarter to about $150 billion.

“We expect to set another record in fiscal 2027, with sequential revenue growth every quarter,” Murphy said.

According to data compiled by LSEG, the company projects first-quarter revenue of $61.5 billion (with a $1.5 billion range), compared to analyst estimates averaging $57.02 billion.

First-quarter adjusted earnings per share are expected to be $38.15, with a $1 range, above the expected $35.40.

Mehrotra also said Micron has already signed agreements for most of its high-bandwidth memory output for 2027 and will increase capital expenditures for fiscal 2027, surpassing previous plans for expanding production capacity.

The company, headquartered in Boise, Idaho, competes with Korean rivals Samsung Electronics 005930.KS and SK hynix 000660.KS, which currently command the largest share of the global high-bandwidth memory market.

Bob O’Donnell, Chief Analyst at TECHnalysis Research, said: “Micron’s results and outlook far exceeded expectations and should firmly silence those who continue to doubt the resilience of AI buildout.”

Fourth-quarter revenue jumped more than fourfold to $54.23 billion, exceeding the expected $51.07 billion. Adjusted earnings per share were $33.42, above the expected $31.61.

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