Micron Rides AI Wave With Upgraded Outlook, Analysts See More Gains Ahead

Core Viewpoint - Micron Technology has raised its August-quarter outlook due to increased demand and pricing for AI-focused memory chips, indicating ongoing strength in the DRAM market through 2026 [1][4]. Group 1: Financial Performance - Micron now expects revenue of $11.2 billion, up from a prior midpoint of $10.70 billion, with an adjusted gross margin of 44.5% compared to 42%, and adjusted EPS of $2.85 versus $2.50 [3]. - JP Morgan analyst Harlan Sur raised the price forecast for Micron from $165 to $185, citing solid execution and improving supply/demand fundamentals [5][6]. Group 2: Market Dynamics - The increase in guidance is attributed to strong DRAM pricing across AI/datacenter, smartphone, and PC markets, with HBM revenue approaching an $8 billion annualized run rate [2][3]. - Tight supply in non-AI DRAM and DDR4 end-of-life shortages are contributing to upward pricing pressure [4]. Group 3: Future Outlook - Sur expects DRAM pricing strength to persist through 2025 and into 2026, supported by significant AI capital expenditures and constrained supply from the HBM4 ramp [4]. - Micron is well-positioned for fiscal 2026 and calendar 2026, with strong momentum in high-margin businesses and market share gains [6].