AI Memory stock prices rise ahead of Micron’s results

Micron to post earnings results

 

Artificial intelligence has become an increasingly important part of the memory-chip industry, with demand for the chips used in AI servers rising sharply. This has made AI-related memory demand an increasingly important driver of Micron’s business and made its results particularly relevant to the wider technology sector.

 

AI IS DRIVING MEMORY DEMAND

The biggest reason memory demand has taken off for companies like Micron, SK Hynix and Western Digital is the huge expansion of AI data centres. AI chips need large amounts of fast memory, and demand has jumped as companies spend billions building new data centres. Micron has said its latest memory products are already being shipped in large amounts. The company is also seeing strong demand for memory used in servers, while higher prices are pushing revenue higher. Anybody wanting to purchase memory for their phones or other devices knows how much higher prices have risen in recent months. Analysts expect the strength in the industry to continue, although the September results will provide an important test of those expectations.

 

MICRON’S STOCK PERFORMANCE

Micron has seen a substantial increase in its share price this year, with shares rising more than 270% so far this year. The stock price is now trading close to June’s record high. Other memory stocks, including SanDisk and SK Hynix, have also risen sharply amid expectations that AI spending will keep driving demand for memory. The latest rise has been helped by growing confidence ahead of the results. 

 

MICRON EARNINGS EXPECTATIONS AND JUNE’S RESULTS

Micron will report its fourth-quarter results on September 30. The company expects revenue of around $50 billion and earnings of about $31 per share. Analyst expectations are slightly higher, with estimates of revenue around $51 billion and earnings above $31 per share. Micron’s previous results on June 24 showed revenue of $41.46 billion, an increase of around 346% year-over-year, while earnings were $25.11, higher than the estimate of around $20.20. So expectations this quarter are very high, and investors will be looking beyond whether the company beats forecasts. What Micron says about the next few quarters will also be important.

 

MICRON IN 2026: EXPANDING PRODUCTION

Micron is planning to open two advanced manufacturing plants in Idaho and two in New York, with production from its Idaho plant to start in 2027. In August, the company announced it was investing $10 billion in a new research lab in Boise to develop future memory technology. In September, Micron said it would expand semiconductor production in India. The expansion is important because Micron does not want to benefit from the current shortage and then find itself unable to meet demand. Increasing production should allow it to benefit from expected growth in future AI-related memory demand.

 

ANALYST EXPECTATIONS

Analysts had raised their expectations ahead of the results. Citi recently increased its price targets after raising estimates for Micron's current and next quarter, citing stronger memory pricing.  On September 28, JP Morgan raised its price target, which is some 65% higher (‘upside’) than the stock’s current price. UBS has also kept a high price target of $1,625. Any change to the outlook could have an impact on the share price.

 

IMPACT ON OTHER STOCK PRICES

Micron's results could also influence other stock prices in the tech sector. Strong results and a positive outlook could be interpreted as evidence of continued AI-related data-centre spending, potentially supporting other semiconductor stocks. SanDisk and SK Hynix have already been moving alongside Micron, while demand for memory is closely linked to the growth of AI processors made by companies such as Nvidia. On the other hand, weaker guidance could raise questions about whether the rapid growth in AI-related memory demand can continue at its current pace. With the Nasdaq at record highs, Micron's results arrive at a time when expectations for technology companies are already high.

 

Conclusion

AI-related demand has become an increasingly important part of Micron’s growth, but the market now expects a lot from the company. The October 1 results should show whether strong demand and higher memory prices are continuing, while its guidance will provide clues about how long the current growth can last.