Micron Technology issued a stronger-than-expected outlook for the first quarter of fiscal 2027, supported by continued demand for memory products used in artificial intelligence infrastructure.
The company expects both revenue and adjusted earnings to exceed Wall Street forecasts, reinforcing expectations that AI-related spending remains a major growth driver.
Micron Q1 Forecast Beats Wall Street Estimates
Micron expects first-quarter revenue of around $61.5 billion, plus or minus $1.5 billion.
That compares with analyst expectations of approximately $56.77 billion.
Adjusted earnings per share are projected at $38.15, plus or minus $1.00, also above the consensus estimate of $36.02.
The outlook reflects continued strength across Micron’s AI-focused product portfolio.
AI Demand Drives Memory Growth
Demand from artificial intelligence applications remained one of the strongest areas of Micron’s business.
Revenue from server LPDDR SOCAMM products more than doubled from the previous quarter.
The company also continued shipping PCIe Gen 5 and Gen 6 solid-state drives for AI-related cache applications.
These products are increasingly important as data centers require faster memory and storage solutions to support large AI workloads.
Growth Remains Strong but Begins to Moderate
Despite the upbeat forecast, Micron’s guidance suggests that earnings growth could slow compared with the previous quarter.
Adjusted earnings per share increased around 33% from the third quarter to the fourth quarter.
By comparison, Micron’s first-quarter forecast implies growth of roughly 14%.
This suggests that the company remains on a strong growth path, although the pace of expansion may begin to normalize.
Margins Expected to Ease Slightly
Micron expects an adjusted gross margin of approximately 86.25% in the first quarter.
That is slightly below the 87% margin recorded in the fourth quarter.
The company also expects adjusted operating expenses of around $2.06 billion.
Micron said operating expenses are expected to rise further during fiscal 2027 as the company increases investment in capacity, technology and AI-related products.
Strong Expectations Were Already Priced In
Micron shares initially moved higher after the earnings release but later gave back much of those gains.
Some investors appeared concerned about slightly lower margins and slower sequential earnings growth.
Analysts also noted that expectations were already high before the report, meaning much of the positive outlook may have already been reflected in the share price.
Jake Behan, Head of Capital Markets at Direxion, said the report helped confirm expectations that AI-related demand could remain strong through 2027 and beyond.
Micron Expects Stronger Fiscal 2027
Chief Executive Sanjay Mehrotra said Micron expects fiscal 2027 to be even stronger after delivering record results in fiscal 2026.
He pointed to artificial intelligence demand and strategic agreements with customers as key drivers of the outlook.
The company also indicated that it plans to increase capital returns to shareholders.
Chief Financial Officer Mark Murphy said Micron intends to strengthen its capital return program beginning in December.
Fourth-Quarter Results Beat Expectations
Micron also reported stronger-than-expected fourth-quarter results.
Adjusted earnings came in at $33.42 per diluted share, above analyst expectations of $31.16.
Revenue reached $54.23 billion, beating the $50.45 billion consensus estimate.
Adjusted gross margin increased to 87% from 84.9% in the previous quarter.
Adjusted operating income rose to $44.64 billion, while adjusted net income increased to $38.40 billion.
AI Remains the Key Growth Driver
Micron’s latest results underline how artificial intelligence continues to reshape demand across the memory-chip industry.
Strong demand from data centers, AI servers and advanced storage systems is supporting revenue growth.
However, investors will also be watching margins, operating expenses and the pace of earnings growth as Micron moves into fiscal 2027.
