Micron Technology shares continued to rise on Tuesday, helped by new memory chip pricing data that suggests strong results ahead.
The stock was up 1.2% in premarket trading on Tuesday, building on an 18% gain over the past month as investors have returned to AI hardware stocks.
Recent pricing trends look positive for shareholders. In July, average selling prices for DRAM increased by 6% from the previous month, and NAND prices rose by 9%, according to World Semiconductor Trade Statistics.
DRAM acts as short-term memory for computers and AI systems, helping manage active data and processes. It brings in about three-quarters of Micron’s revenue. NAND flash memory, mainly used for long-term data storage, makes up most of the rest.
J.P. Morgan pointed out that June memory data was revised higher, with both DRAM and NAND sales increased by about 6%. The firm said this shows a strong and steady economic foundation in the memory sector.
This pricing strength is likely to be clear when Micron reports its fiscal fourth-quarter earnings on Sept. 30. Analysts expect adjusted earnings per share to rise sharply from last year, and revenue to jump to $50.41 billion from $11.32 billion, according to FactSet.
Micron will not get the full benefit of higher prices because long-term supply deals with major customers limit pricing in return for stable margins. Still, current trends suggest the memory chip market could keep growing for some time.
