Micron Forecasts Strong Quarterly Results on Soaring Memory Chip Demand
By Reuters | 24 Jun, 2026

Micron forecast and Q3 resuls beat Wall Street expectations as AI-driven shortages force large-scale data center customers and other chip buyers to fund capacity, reshaping the memory market.

Micron forecast quarterly profit and revenue well above expectations on Wednesday and said its customers had committed $22 billion to lock in future supply of memory chips, sending its shares surging 12% in after-hours trading.

The forecast - and third-quarter results that beat Wall Street estimates - underscore how AI-driven shortages are forcing Micron's large-scale data center customers and other chip buyers to fund capacity, moves that are reshaping the memory market.

Micron, which is the only U.S.-based manufacturer of high-end memory chips used alongside Nvidia's AI processors, has seen demand for these HBM chips far outstrip its production capacity.

"We expect tight conditions to persist beyond calendar 2027 as a result of AI-driven demand across all segments coupled with structural supply constraints," Micron CEO Sanjay Mehrotra said in the company's prepared remarks.

Micron's stock has surged more than threefold this year, despite a 13% plunge on Tuesday as part of a broader selloff.

The chipmaker also outlined a business model shift aimed at making demand less cyclical. The $22 billion in commitments will come from 16 strategic customer agreements Micron has signed, spanning data center, consumer and automotive markets, with take-or-pay commitments, cash deposits and pricing floors designed to lock in supply and protect margins.

Micron also said that remaining performance obligations - a key indicator of future contracted revenue - for the customer agreements it has entered into so far are around $100 billion.

SUPPLY CONSTRAINTS TO LAST

Micron, a key supplier for Nvidia's AI processors, has benefited as AI chip and server makers rush to secure a limited supply.

"The size and scale of the AI build out has been underestimated at every turn and memory will continue to command premium pricing on supply constraints," said Daniel Newman, CEO of tech research firm Futurum Group.

Major memory chip makers are prioritizing high-bandwidth memory to meet AI demand, leaving consumer electronics makers scrambling to secure conventional memory and driving prices of products higher.

Mehrotra added that the company does not have a line of sight as to when memory supply will be able to catch up with increasing demand.

"Any easing in supply could actually skew bearish for Micron. The bull case is built on tightness, once supply starts to creep back, pricing power is the first thing at risk," said Jake Behan, head of capital markets at Direxion.

SPENDING RAMPS

Micron said it intends to increase its capital return, while it invests heavily in expanding infrastructure to satisfy soaring demand.

The company expects fourth-quarter capital expenditure of around $10 billion, while analysts expect spending of $8.89 billion. Separately on Wednesday, SK Hynix said it plans to raise up to $29.4 billion through a U.S. stock market listing.

Micron reported third-quarter revenue of $41.46 billion, flying past estimates of $35.85 billion.

The company reported adjusted profit of $25.11 per share, compared with estimates of $20.78 per share.

Micron expects fourth-quarter adjusted earnings per share of $31, plus or minus $1, compared with the estimates of $25.84 per share.

(Reporting by Anhata Rooprai and Zaheer Kachwala in Bengaluru, Editing by Deepa Babington and Anil D'Silva)