Micron Technology shares went up on Friday after Oracle shared a strong business update that boosted confidence in AI-related stocks.
Micron shares rose in premarket trading on Friday, bouncing back after falling on Thursday. The overall market was also slightly higher, but Micron shares were still down for the week going into the session.
Micron and other AI-related stocks rose after Oracle said its cloud infrastructure business, which rents out AI computing power online, grew revenue by 121% in its fiscal first quarter to $7.4 billion. This business now makes up most of Oracle’s $664 billion order backlog.
Oracle’s strong results are a good sign for memory chipmakers like Micron. AI cloud systems need both NAND and DRAM memory—DRAM for fast working memory and NAND flash for long-term storage. Oracle’s numbers suggest the memory chip shortage is still a problem. Wall Street thinks average memory chip prices will go up more than 20% in the third quarter compared to the last, and both DRAM and NAND are expected to stay in short supply until 2027.
Now, investors are wondering how Micron shares will do as the company gets ready to report its fiscal fourth-quarter earnings on Sept. 30. The stock has mostly stayed in a tight range lately, close to its 50-day moving average. Since peaking in late June, shares have dropped and, even though they sometimes rise above important price levels, they have not held those gains for long.
Oracle’s results gave Micron a boost, but investors may have to wait for Micron’s own earnings report later this month for the next big move.
