Key Takeaways
- Micron shares gained 0.8% during Friday’s premarket session following Oracle’s announcement of a 121% year-over-year surge in cloud infrastructure revenue, reaching $7.4 billion.
- Industry analysts project memory chip average selling prices will increase over 20% in the third quarter, with supply constraints for both DRAM and NAND continuing through 2027.
- The company’s latest quarterly results showed revenue of $41.46 billion, representing a 345.8% annual increase, while EPS reached $25.11, surpassing forecasts by $3.72.
- Wall Street maintains a consensus “Buy” recommendation on MU stock with an average price target of $1,295.63, while one analyst projects shares could reach $2,000.
- Investors are awaiting Micron’s fiscal fourth-quarter earnings release scheduled for September 30.
Micron Technology (MU) shares advanced 0.8% to $985 during Friday’s premarket session, recovering from Thursday’s 4.9% decline.
The uptick followed Oracle’s announcement that its cloud infrastructure division, which provides AI server rentals via the internet, generated $7.4 billion in revenue during its first fiscal quarter—a remarkable 121% year-over-year expansion.
Oracle’s cloud infrastructure business accounts for the bulk of the company’s massive $664 billion backlog. This magnitude has significant implications for memory chip consumption.
AI-powered cloud infrastructure requires substantial quantities of both DRAM and NAND memory components. DRAM supports high-performance working memory operations, while NAND flash delivers persistent data storage capabilities. Increased AI infrastructure investments generally translate to heightened demand for both memory types.
Notwithstanding Friday’s premarket uptick, Micron shares remained 3.9% lower for the week through Thursday’s closing bell. Friday’s opening price stood at $977.41.
Tight Memory Chip Supply Outlook Persists
Market analysts anticipate average memory chip pricing will climb more than 20% overall during the third quarter versus the second quarter. Supply constraints for both DRAM and NAND technologies are projected to persist until 2027.
Micron has secured multi-year supply agreements valued at approximately $22 billion for memory products extending through 2030, featuring guaranteed minimum pricing provisions. These contracts could help stabilize the historically volatile memory market cycle.
The company is also making competitive gains. Micron has reportedly reduced its gap with the second-largest DRAM manufacturer to just 1.6 percentage points after closing a 6.4-point deficit within a single quarter.
Strong Quarterly Performance Exceeds Expectations
Micron’s latest quarterly financial results, announced on June 24, significantly exceeded analyst projections. The company recorded revenue of $41.46 billion, marking a 345.8% year-over-year increase. Earnings per share totaled $25.11, outperforming the consensus forecast of $21.39 by $3.72.
The company delivered a return on equity of 71.13% alongside a net margin of 55.91%. Management has provided guidance for fourth-quarter EPS between $30 and $32.
Analyst consensus estimates call for full-year EPS of $72.93. The stock currently trades at a P/E ratio of 22.13, with a 52-week peak of $1,255.00.
Following its June 25 close at $1,213.56, MU shares have declined approximately 19%. The stock has consolidated within a range for nine weeks, hovering around its 50-day moving average of $929.44.
Institutional holders control roughly 80.84% of outstanding MU shares. The average analyst price target stands at $1,295.63, with DA Davidson establishing a $2,000 target alongside a “Buy” recommendation.
The upcoming critical event for shareholders is September 30, when Micron releases its fiscal fourth-quarter financial results.
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