Micron (MU) Stock Rises as Oracle’s Cloud Boom Signals Strong AI Chip Demand

Key Takeaways

• Shares of Micron advanced 0.8% in early Friday trading following Oracle’s announcement that cloud infrastructure revenue surged 121% annually to reach $7.4 billion.
• Industry analysts project memory chip prices to increase over 20% during Q3, as both DRAM and NAND markets face supply constraints expected to persist until 2027.
• The company’s latest quarterly results showed revenue of $41.46 billion, representing a 345.8% annual increase, while earnings per share of $25.11 exceeded forecasts by $3.72.
• Wall Street maintains a collective “Buy” stance on MU shares with an average price objective of $1,295.63, though one analyst projects potential upside to $2,000.
• Investors are now focused on Micron’s upcoming fiscal Q4 financial results scheduled for release on September 30.

Micron Technology (MU) shares experienced a 0.8% uptick to $985 during premarket hours Friday, recovering from Thursday’s 4.9% decline.

Micron Technology, Inc., MU

The upward momentum followed Oracle’s disclosure that its cloud infrastructure division, which provides AI server rental services via the internet, generated $7.4 billion in revenue during its fiscal first quarter—representing a 121% year-over-year expansion.

Oracle’s cloud infrastructure business also accounts for the lion’s share of the tech giant’s $664 billion order backlog. This substantial scale has significant implications for memory semiconductor demand.

AI-powered cloud infrastructure depends heavily on both DRAM and NAND memory technologies. DRAM serves as high-performance working memory, while NAND flash delivers persistent data storage capabilities. Increased AI infrastructure investment generally translates to heightened demand across both memory categories.

Despite Friday’s early gains, Micron shares remained down 3.9% for the week through Thursday’s market close. Trading commenced Friday at $977.41.

Memory Semiconductor Supply Constraints Set to Persist

Equity research analysts anticipate average memory chip pricing will climb more than 20% in the third quarter versus the second quarter. Supply shortages for both DRAM and NAND technologies are projected to continue through 2027.

Micron has secured multi-year supply agreements with customers totaling approximately $22 billion in memory commitments extending to 2030, featuring guaranteed minimum pricing structures. These contracts could help stabilize the historically volatile memory market cycle.

The company is also gaining competitive ground. Reports indicate Micron now trails the second-largest DRAM provider by just 1.6 percentage points after reducing a 6.4-point market share deficit within a single quarter.

Latest Quarterly Performance Exceeded Expectations

Micron’s latest quarterly performance, disclosed on June 24, significantly surpassed Wall Street projections. Revenue reached $41.46 billion, marking a 345.8% year-over-year surge. Earnings per share totaled $25.11, eclipsing the consensus forecast of $21.39 by $3.72.

The chipmaker posted a return on equity of 71.13% alongside a net profit margin of 55.91%. Management has issued Q4 EPS guidance ranging from $30 to $32.

The Street’s consensus calls for full-year EPS of $72.93. MU currently trades at a P/E multiple of 22.13 and recorded a 12-month peak of $1,255.00.

Following its June 25 close at $1,213.56, MU has declined approximately 19%. The stock has traded within a range for nine weeks, hovering around its 50-day moving average of $929.44.

Institutional shareholders 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 objective alongside a “Buy” recommendation.

The next critical milestone for shareholders arrives on September 30, when Micron unveils its fiscal fourth-quarter financial results.

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