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Micron tops forecasts with AI-fueled HBM demand, sees strong Q1 revenue

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Micron Technology projected first-quarter revenue of $12.5 billion ± $300 million, well above Wall Street’s estimate of $11.94 billion, as booming demand for its high-bandwidth memory (HBM) chips drives growth amid the AI race.

AI demand supercharges Micron

  • Q4 HBM revenue hit nearly $2 billion, putting Micron on pace for ~$8B annually, CEO Sanjay Mehrotra said.

  • HBM chips, built by stacking DRAM vertically, reduce power use while enabling massive data processing — making them indispensable for training and running advanced AI models.

  • Micron is a key HBM supplier to Nvidia, whose dominance in AI accelerators makes HBM supply one of the most competitive battlegrounds in semiconductors.

2026 outlook already sold out

  • Micron expects to lock in deals for all 2026 HBM capacity in the coming months.

  • HBM3E pricing agreements are nearly complete; HBM4 pricing talks are ongoing.

  • “The pricing on HBM4 is actually significantly higher than the pricing on HBM3E,” said Chief Business Officer Sumit Sadana, citing tight supply and strong ROI expectations.

  • TSMC will partner with Micron to manufacture the base logic die for its HBM4E chips.

Financial performance

  • Adjusted Q4 EPS: $3.03, topping forecasts.

  • Adjusted gross margin forecast (Q1): 51.5%, far above expectations of 45.9%.

  • Analysts said stronger-than-expected pricing drove the margin boost.

U.S. policy and subsidies

  • Micron has received $6.2B under the CHIPS and Science Act, passed under former President Joe Biden.

  • Current Commerce Secretary Howard Lutnick is exploring converting subsidies into equity stakes in chipmakers, but Sadana said Micron does not expect its grant terms to change.

  • Micron recently received a disbursement after completing a milestone at its Idaho fab, Mehrotra confirmed.

Big picture

Micron is riding the wave of AI-driven chip demand, securing long-term contracts at higher prices while boosting profitability. With HBM4 set to command premium pricing, Micron is positioning itself as a critical player alongside Nvidia, Samsung, and SK Hynix in the global AI supply chain.

Nvidia’s $100B OpenAI deal sparks funding, valuation, and competition questions

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Nvidia’s plan to invest up to $100 billion in OpenAI — while also supplying millions of its GPUs to the ChatGPT maker — is unprecedented in the tech sector and raises major uncertainties about finance, competition, and market impact.

Key open questions:

1. Where does the rest of the money come from?

  • Nvidia has pledged $10B per gigawatt for 10 GW of compute, but CEO Jensen Huang estimates $50B is needed per gigawatt (with $35B of that spent on Nvidia hardware).

  • That leaves a massive $40B funding gap per GW. OpenAI has not disclosed how it will raise the remainder.

2. How does this fit OpenAI’s shift to for-profit?

  • OpenAI is transitioning from a nonprofit into a public benefit corporation overseen by its nonprofit parent.

  • Nvidia’s investment may hinge on this structure, but it’s unclear if funding flows to the nonprofit entity or the restructured PBC.

  • Regulatory approval in Delaware and California is still pending.

3. What does it mean for OpenAI’s valuation?

  • Nvidia’s initial $10B tranche is pegged to OpenAI’s current $500B valuation.

  • But there’s no timeline for deploying the full 10 GW or committing the entire $100B. Future investments may depend on OpenAI’s valuation at the time, raising uncertainty about dilution and pricing.

4. How will competition be affected?

  • Nvidia’s chips remain the most coveted resource in AI. By tying up vast capacity with OpenAI, rivals like Anthropic, Google, or even Microsoft could face constraints in access.

  • Competitors like AMD may find it harder to gain traction if Nvidia prioritizes OpenAI, despite Nvidia’s public pledge to “make every customer a top priority.”

5. What does it mean for Oracle?

  • Oracle has signed hundreds of billions in cloud contracts with OpenAI, but analysts question whether OpenAI has the liquidity to pay.

  • Nvidia’s cash infusion could strengthen Oracle’s revenue outlook, reassuring investors and credit agencies like Moody’s, which flagged funding risks.

Big picture:

The deal deepens the interdependence of AI’s leading players — Nvidia for chips, OpenAI for models, Microsoft for software integration, and Oracle for cloud. But it also amplifies antitrust concerns, as U.S. regulators eye whether such alliances foreclose competition in the AI stack.

Nvidia to invest up to $100B in OpenAI, fueling AI dominance — and antitrust worries

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Nvidia will invest up to $100 billion in OpenAI and supply it with advanced data center chips, the companies confirmed Monday, marking one of the largest-ever deals in artificial intelligence. The pact ties together the world’s leading AI chipmaker and the sector’s most high-profile model developer, deepening concerns about market concentration.

Deal structure

  • Nvidia will acquire non-voting shares in OpenAI.

  • OpenAI will use the cash to purchase Nvidia chips, creating what analysts called a “circular” arrangement.

  • The two companies signed a letter of intent to deploy at least 10 gigawatts of Nvidia systems — equivalent to powering 8 million U.S. homes.

  • Nvidia will begin deliveries in late 2026 via its new Vera Rubin platform, starting with 1 GW of compute.

  • Initial investment: $10B, with further tranches scaling toward $100B.

OpenAI CEO Sam Altman said: “Compute infrastructure will be the basis for the economy of the future, and we will utilize what we’re building with Nvidia to both create new AI breakthroughs and empower people and businesses with them at scale.”

Market reaction

  • Nvidia shares hit a record intraday high (+4.4%).

  • Oracle gained 6% amid its own collaboration with OpenAI, Microsoft, and SoftBank on the $500B Stargate data center project.

  • Broadcom fell 0.8% on concerns the deal could complicate its custom-chip work with OpenAI.

Industry context

The pact follows:

  • Microsoft’s multibillion-dollar investments in OpenAI since 2019.

  • Nvidia’s $5B investment in Intel and its $6.6B backing of OpenAI in 2024.

  • Ongoing OpenAI efforts to design its own AI chips with Broadcom and TSMC, which reportedly remain unchanged.

Antitrust spotlight

The DOJ and FTC reached an agreement in 2024 enabling potential probes into the roles of Microsoft, Nvidia, and OpenAI in AI. Analysts warn this deal could intensify scrutiny:

  • Andre Barlow, antitrust lawyer: “It could potentially lock in Nvidia’s chip monopoly with OpenAI’s software lead, making it more difficult for rivals like AMD or competing AI labs to scale.”

  • Stacy Rasgon (Bernstein): The structure raises concerns about Nvidia’s investment dollars coming back as chip purchases.

The Trump administration has so far taken a lighter regulatory approach than Biden’s, emphasizing growth over enforcement — though officials say protecting competition in AI infrastructure remains a long-term priority.