Micron (MU), 30 Upgrades, 0 Downgrades for Profit Outlook... How Far Will AI Memory's Sprint Go?

▲ Micron (MU), Artificial Intelligence (AI), Memory Chip/AI Generated Image

Wall Street's expectations for Micron Technology (MU) are rising sharply. The earnings per share (EPS) outlook for future fiscal years has been raised 30 times in the last three months, with not a single downgrade.

According to the US investment media outlet Insider Monkey on July 5 (local time), Micron's EPS outlook for future fiscal years has been upgraded 30 times in the last three months. Revenue forecasts also increased 33 times, with no downgrades. This is a result of both memory supply shortages and expectations for improved performance.

Performance also exceeded market expectations. On June 24, Micron announced record-high results for its fiscal third quarter. Revenue reached $41.46 billion, and profits significantly surpassed market forecasts. The revenue outlook for the fourth quarter also exceeded Wall Street's expectations.

The proliferation of AI is tightening memory supply and demand, acting as a driving force for Micron's performance improvement. As AI workloads increase, demand for high-bandwidth memory, DRAM, and storage devices has grown, leading customers to enter long-term supply agreements to secure necessary volumes.

On July 1, Micron signed a long-term supply agreement with General Motors (GM). Insider Monkey pointed out that while this contract itself is not a core driver of the AI business, it demonstrates a trend where customers are moving to secure supply volumes as memory becomes scarcer and transforms into a strategic component.

Micron designs and manufactures DRAM, NAND, high-bandwidth memory, and solid-state storage devices. Insider Monkey assessed that the tight supply and demand in the memory market is linking AI demand to Micron's performance improvement, and the recent trend of upward revisions in forecasts stems from the same background.

[Key Article Summary]

-Micron's EPS outlook for future fiscal years has been upgraded 30 times in the last three months, with no downgrades.

-Revenue forecasts also increased 33 times, with fiscal Q3 revenue reaching $41.46 billion.

-Increased demand for high-bandwidth memory and DRAM due to AI proliferation, along with memory supply shortages, were identified as drivers for performance improvement.

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