Micron Posts Record $18.3 Billion Free Cash Flow on AI Memory Demand

CLSA's Bhavtosh Vajpayee said the AI semiconductor cycle will not peak in 2028, calling that expectation "utterly wrong" and projecting the current chip shortage will persist until roughly 2030. Speaking to CNBC on Wednesday, Vajpayee said demand for GPUs and custom AI chips currently exceeds supply by about 73%, and he expects upstream semiconductor and hardware companies to benefit as the shortage worsens alongside expanding AI infrastructure spending. He also noted that large semiconductor companies trade at lower valuation multiples than many other parts of the AI ecosystem. Vajpayee highlighted Meta's Muse as a notable recent development for making AI agent creation easier through simple language commands, and said similar advances should emerge in China, where companies including Alibaba are developing smaller AI models. He pointed to Apple as particularly important because smartphones already sit at the center of consumers' daily lives and could become the primary gateway for accessing AI services, while CLSA sees clearer opportunities in AI hardware suppliers than among model developers, where he said it remains too early to determine the eventual winners.

Super Micro Computer has begun commercial shipments of server systems built around NVIDIA's next-generation Vera Rubin platform, sending its shares down more than 3% Thursday afternoon. The company is shipping Vera Rubin NVL72 racks through its Data Center Building Block Solutions, combining computing hardware with liquid cooling, networking, storage and power components; each rack design uses 72 Rubin GPUs and 36 Vera CPUs. Super Micro said the platform can support deployments ranging from five-megawatt projects to data centers spanning gigawatt-scale capacity, and that a scalable unit can include 16 compute racks with 1,152 Rubin GPUs and 331 terabytes of HBM4 memory. At a Sept. 10 Goldman Sachs conference, Senior Vice President Michael Staiger said the company had about $60 billion in orders backing its fiscal 2027 revenue forecast of $65 billion to $72 billion. The company sees demand from neocloud operators, enterprises and sovereign customers.

NVIDIA ended the second quarter of fiscal 2027 with $279 billion in supply and capacity commitments, up from $119 billion in the first quarter, with most tied to memory and manufacturing facilities for current and future data center products. The company reported $96.22 billion in second-quarter fiscal 2027 revenues, up 106% year over year, while Data Center revenues surged 117% to $89.02 billion, and it guided third-quarter revenues to $108 billion, plus or minus 2%, implying 89.5% year-over-year growth. NVIDIA expects fiscal 2028 revenue growth of about 70%, though supply constraints could limit how quickly it meets demand, and it warns that changing demand could make the commitments difficult to reduce. Rivals are expanding as well: AMD's Data Center revenues rose 107% year over year to $6.7 billion in the second quarter of 2026, with Anthropic planning to deploy up to 2 gigawatts of MI450-series GPUs on the Helios rack-scale platform and Microsoft deploying Helios at scale on Azure, while Intel's second-quarter revenues rose 25% to $16.13 billion and its Data Center and AI revenues surged 59% to $6.26 billion. The Zacks Consensus Estimate for NVIDIA's fiscal 2027 revenues stands at $406.05 billion, an 88% year-over-year increase, and the stock trades at a forward price-to-earnings ratio of 17.11 versus the sector's average of 21.45.