Updated Version 4 - Micron AI-driven revenue forecast far exceeds expectations, with backlog orders surging

Added the word "shares" in the second paragraph

Anhata Rooprai

Reuters, September 30 - Micron Technology (MU.O) on Wednesday forecast quarterly revenue above market expectations and said customer purchase commitments under its long-term supply agreements have reached $32 billion, indicating continued strong demand for artificial intelligence memory chips.

Driven by optimistic market expectations for its AI-powered growth prospects, the company's shares have more than tripled so far this year and it joined the $1 trillion market value club in May. Earlier Wednesday, its shares rose more than 1% in after-hours trading, but the latest quote saw a slight pullback.

The rise of generative AI has made high-bandwidth memory essential for data centers, benefiting companies like Micron—Micron is a key supplier to NVIDIA NVDA.O, whose processors dominate the computing workload sector.

Chief Executive Sanjay Mehrotra announced in prepared remarks that the financial commitments in Micron's customers' long-term supply agreements have increased significantly, rising from $22 billion reported in June this year (link) to $32 billion, with most of this paid as cash deposits.

"We expect supply and demand for memory and storage to be tighter in fiscal 2027 and 2028 than in fiscal 2026," Mehrotra added.

Micron's order volume has far exceeded its capacity, prompting the company in July to raise its U.S. investment plan through 2035 to over $250 billion (link), as tech giants such as Amazon AMZN.O and Alphabet GOOGL.O plan to invest more than $730 billion in AI infrastructure this year.

Chief Financial Officer Mark Murphy said that Micron's remaining performance obligations under these agreements—a key indicator of future contractual revenue—have increased from around $100 billion reported last quarter to about $150 billion.

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

According to data compiled by the London Stock Exchange Group (LSEG), the company expects first-quarter revenue of $61.5 billion (plus or minus $1.5 billion), while the analyst average expectation was $57.02 billion.

First-quarter adjusted earnings per share are expected to be $38.15, plus or minus $1, above the expected $35.40.

Mehrotra also said Micron has signed agreements for most of its high-bandwidth memory production for 2027 and will increase its capital expenditure in fiscal 2027 to exceed the previous expansion plans.

The Boise, Idaho-based company competes with South Korea rivals Samsung Electronics 005930.KS and SK Hynix 000660.KS, with the two latter companies currently holding a dominant position in the global high-bandwidth memory market.

Bob O'Donnell, chief analyst at TECHnalysis Research, said: "Micron's well-above-expectation earnings and outlook should decisively put to rest the doubts of those still questioning the resilience of AI buildout."

Fourth-quarter revenue grew to $54.23 billion, more than quadrupling from the same period last year and surpassing the expected $51.07 billion. Adjusted earnings per share reached $33.42, above the $31.61 expectation.

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