Micron (MU) Stock Jumps After Oracle’s Cloud Revenue Blows Past Estimates

TLDR

• Micron stock rose 0.8% in premarket trading Friday after Oracle reported its cloud infrastructure sales jumped 121% year over year to $7.4 billion.
• Wall Street expects average memory chip selling prices to rise more than 20% in Q3, with both DRAM and NAND expected to remain undersupplied into 2027.
• Micron reported quarterly revenue of $41.46 billion, up 345.8% year over year, with EPS of $25.11, beating estimates by $3.72.
• Analysts hold an average “Buy” rating on MU with a consensus price target of $1,295.63, with one firm setting a target as high as $2,000.
• Micron’s next major catalyst is its fiscal Q4 earnings report on September 30.

Micron Technology (MU) stock climbed 0.8% to $985 in premarket trading on Friday, bouncing back after a 4.9% drop on Thursday.

Micron Technology, Inc., MU

The move came after Oracle reported that its cloud infrastructure segment, which rents AI servers over the internet, posted revenue of $7.4 billion in its fiscal first quarter. That was a 121% increase year over year.

Oracle’s cloud infrastructure unit also makes up the majority of the company’s $664 billion backlog. That scale matters for memory chip demand.

AI cloud infrastructure relies on both DRAM and NAND memory. DRAM handles high-speed working memory, while NAND flash provides long-term data storage. More AI infrastructure spending typically means more demand for both.

Despite Friday’s premarket gain, Micron stock was still down 3.9% for the week as of Thursday’s close. The stock opened Friday at $977.41.

Memory Chip Supply Crunch Expected to Continue

Wall Street analysts expect average memory chip selling prices to rise more than 20% overall in Q3 compared to Q2. Both DRAM and NAND are expected to remain undersupplied through 2027.

Micron has reportedly signed multiyear customer agreements worth around $22 billion in memory supply through 2030, including guaranteed floor prices. Those deals could help smooth out the traditional boom-and-bust memory cycle.

Micron is also closing the gap on its competitors. The company is reportedly just 1.6 percentage points behind the number two DRAM supplier after narrowing a 6.4-point gap in a single quarter.

Micron’s Recent Earnings Were a Blowout

Micron’s most recent quarterly results, reported on June 24, were well above expectations. Revenue came in at $41.46 billion, up 345.8% year over year. EPS hit $25.11, beating the $21.39 consensus estimate by $3.72.

The company’s return on equity stood at 71.13% and its net margin was 55.91%. Micron has guided for Q4 EPS of $30 to $32.

Analysts on average expect Micron to post full-year EPS of $72.93. The stock has a P/E ratio of 22.13 and a 12-month high of $1,255.00.

Since closing at $1,213.56 on June 25, MU has dropped about 19%. The stock has been rangebound for nine weeks, trading near its 50-day moving average of $929.44.

Institutional investors own around 80.84% of MU. The consensus analyst price target is $1,295.63, with DA Davidson setting a $2,000 target and a “Buy” rating.

The next key date for investors is September 30, when Micron reports its fiscal fourth-quarter earnings.

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