AI-Fueled Demand to Boost Micron Technology's DRAM Revenues in Q1

Micron Technology, Inc. MU will report its first-quarter fiscal 2026 results on Dec. 17, after market close, and expectations are running high. The company has been gaining momentum due to the surge in artificial intelligence (AI) investments and its strong ties with leading tech firms.

The Zacks Consensus Estimate for first-quarter revenues and non-GAAP earnings per share indicates year-over-year growth of 45.7% and 117.3%, respectively. Robust sales at the company’s Dynamic Random Access Memory (“DRAM”) business are likely to have remained the key growth catalyst in the to-be-reported quarter.

Click here to know how Micron Technology’s overall fiscal first-quarter results are likely to be.

MU’s DRAM Business: AI-Led Demand to Boost Sales

Micron Technology has found itself in a sweet spot amid the AI revolution, which is driving the skyrocketing demand for memory and storage solutions. AI systems, particularly large language models (LLMs) and generative AI applications, require massive data processing and storage capabilities, creating a growing need for high-performance DRAM.

Micron Technology’s DRAM segment is expected to be the key growth driver of its first-quarter results. The Zacks Consensus Estimate for DRAM revenues stands at $10.13 billion, calling for stellar 58.3% year-over-year growth.

This not only underscores Micron Technology’s market strength but also highlights the improved pricing dynamics in the DRAM industry. After struggling with oversupply issues in previous years, the memory market is showing signs of stabilization, which has strengthened pricing power and boosted MU’s margins.

Moreover, Micron Technology’s mass production of its HBM3E (high-bandwidth memory) for NVIDIA Corporation’s NVDA next-generation AI chips, including the H200 and GB200 GPUs, has positioned it as a vital supplier for AI powerhouses. With HBM memory in short supply and NVIDIA driving relentless AI demand, Micron Technology’s pricing leverage for these premium products is likely to be a major DRAM revenue booster in the first quarter.

MU Benefits From a Strong Partner Base

Micron Technology’s partnerships with major tech players such as NVIDIA, Advanced Micro Devices, Inc. AMD and Marvell Technology, Inc. MRVL are giving it a big edge in the AI race. These partnerships help MU secure steady revenue streams and cement its reputation as a trusted supplier in the high-performance computing space.

Micron Technology’s ties with NVIDIA are especially valuable. NVIDIA has confirmed Micron as a key HBM supplier for its Blackwell GPUs, linking MU to the fast-growing AI hardware ecosystem. Advanced Micro Devices is another major partner. Micron Technology’s HBM3E chips are being used in Advanced Micro Devices’ AI-enabled Instinct MI350 GPUs, which are boosting sales as AI infrastructure spending rises. MU is likely to have capitalized on this massive AI infrastructure buildout in the to-be-reported quarter.

Micron Technology is also working with Marvell Technology on custom memory solutions. Marvell Technology is building advanced AI silicon, and MU’s memory chips are part of its high-performance systems. These partnerships show that the memory chip maker is becoming a go-to supplier for companies building AI data centers and related technology.

The abovementioned factors are likely to have driven this Zacks Rank #1 (Strong Buy) company’s overall growth in the to-be-reported quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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