Micron's AI-fueled revenue forecast blows past estimates, backlog swells

By Anhata Rooprai

Sept 30 (Reuters) - Micron ‌Technology forecast quarterly ​revenue above ​estimates on Wednesday and said customers had increased commitments under its long-term supply agreements to $32 billion, signaling unabated demand for AI memory chips.

The generative ‌AI boom has made high-bandwidth memory essential for data centers, benefiting companies ⁠such as Micron, a key supplier to Nvidia, whose processors dominate computing workloads.

Micron has seen orders far exceed ‌capacity, which in July led ‌it to lift planned US investments to over $250 billion through 2035, as Amazon, Alphabet and other tech giants are set to spend more than $730 billion on AI infrastructure ​this year.

In his prepared remarks, CEO Sanjay Mehrotra announced that Micron's customers have significantly increased their financial commitments under long-term supply agreements, raising the total to $32 billion from ⁠the $22 billion reported in June, with the majority of them being in the form of cash deposits.

"We expect memory and ​storage supply-demand conditions to be much tighter in fiscal 2027 and 2028 than they were in 2026," Mehrotra added.

Finance chief Mark Murphy said ​Micron's remaining performance obligations — a key indicator of ‌future contracted revenue — under those agreements had risen to about $150 billion, up from roughly $100 billion reported last quarter.

"We expect fiscal 2027 to be ⁠another record year, with sequential revenue growth each quarter," Murphy said.

The company expects first-quarter revenue of $61.5 billion, plus or minus $1.5 billion, compared with analysts' average estimate of $57.02 billion, according to data compiled by ⁠LSEG.

Adjusted profit is expected to be $38.15 per share in the first quarter, plus or minus $1, above estimates ​of $35.40.

Mehrotra also said that Micron has secured agreements for most of its 2027 high-bandwidth memory output and will increase fiscal 2027 capital spending above prior plans to add capacity.

The Boise, Idaho-based company competes with ‌South Korean rivals Samsung Electronics and SK Hynix, which lead global high-bandwidth memory market share.

"Micron's complete blowout earnings and forecast should put ‌the nail in the coffin of the ongoing doubters about the resiliency of the AI buildout," ⁠said Bob O'Donnell, chief analyst at ‌TECHnalysis Research.

Fourth-quarter revenue more than ​quadrupled to $54.23 billion, beating estimates of $51.07 billion. Adjusted profit came in at $33.42 per share, exceeding estimates of $31.61.

(Reporting by Anhata Rooprai in Bengaluru; Editing by ‌Maju Samuel)

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