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Micron Technology Sees AI Keeping DRAM Demand Above Supply Beyond 2027, Morgan Stanley Says

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Micron Technology (MU) sees artificial intelligence keeping DRAM memory demand well above supply beyond 2027, with the company posting "good" fiscal Q3 results and outlook, modest increases in capex and better than expected long-term agreement disclosures, Morgan Stanley said in a note Thursday.

The company's fiscal Q4 guidance of revenue of $50 billion and adjusted earnings per share of $31 at the midpoint was higher than Morgan Stanley estimates of $43.33 billion and $26.01, respectively. Micron further guided spending of $27 billion in fiscal 2026, up from $25 billion previously, the firm noted.

For the next quarter, Morgan Stanley now expects revenue and adjusted EPS of $50.02 billion and $31.20. For the November quarter, Morgan Stanley raised its estimates to $57.56 billion in revenue and $35.57 in adjusted EPS. For fiscal 2027, Morgan Stanley now expects $266.87 billion and $168.52, respectively.

Additionally, Micron announced 16 deals which account for 20% of DRAM volume and one-third of NAND volume between now and that 2030 timeframe, with prices at the ceiling similar to current Q2 pricing, Morgan Stanley noted.

Morgan Stanley raised its price target to $1,200 from $1,050 and maintained its overweight rating.

Price: $1173.07, Change: $+125.15, Percent Change: +11.94%

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