Episode 214: Today, we survey Micron&#x27;s blockbuster earnings, what they reveal about the next phase of the AI buildout and the ripple effect being felt in consumer product prices. Then, we spin through the headlines moving markets – including today&#x27;s inflation report and what it could mean for the Fed&#x27;s next rate decision. Plus: earnings from Darden Restaurants and BlackBerry. Finally, it&#x27;s Prime Day... and Alexa wants to help you shop. We welcome Daniel Rausch, Vice President of Alexa and Echo at Amazon, to discuss Alexa&#x27;s AI-era upgrades, how consumers are responding... and whether Alexa is really always listening. Visit: Aflac.com/BrewMarkets www.brewmarkets.com Subscribe to the Brew Markets newsletter: https://www.morningbrew.com/brew-mark... Follow Brew Markets on social: Instagram: instagram.com/brewmarkets TikTok: tiktok.com/@brewmarkets X: x.com/brewmarkets Follow Ann Berry on social: Instagram: instagram.com/annberry_nyc X: x.com/AnnBerry_NYC Listen to Brew Markets Here: swap.fm/l/9Qk4z73Z2nEwFiCB4qee Watch Brew Markets Here:⁠ https://www.youtube.com/@BrewMarkets Stocks mentioned: $MU $AAPL $MSFT $BB $DRI $AMZN The content shared on this podcast is for informational and entertainment purposes only and should not be considered financial, legal, or investment advice. Brew Markets, Morning Brew and their hosts are not licensed financial advisors. Listeners should conduct their own research and consult with qualified professionals before making any financial decisions or investments. The views expressed are those of the hosts and guests and do not necessarily reflect the views of Morning Brew or its affiliates. This podcast may include paid endorsements or sponsorships Learn more about your ad choices. Visit megaphone.fm/adchoices

Micron’s Memory Crunch Hits Consumers & Alexa+ Goes Shopping

Brew Markets

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**Podcast:** Brew Markets

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Many employees can't afford a hefty medical bill that pops up out of the blue, but it happens. And employees who are financially stressed are, understandably, more likely to be distracted at work, costing their employers greatly and lost productivity. Luckily, Aflac plans help with out-of-pocket expenses not covered by health insurance and can be offered at no direct cost to businesses. Learn more at aflac.com slash brewmarkets. That's aflac.com slash brewmarkets.

Olive Garden, the capital grill, Chewy's. Darden restaurants reported earnings and it isn't endless bowls of pasta spearheading growth. Alexa Plus wants to do your shopping. We sit down with an Amazon exec to find out if customers are buying the AI Assist. And the hyperscalers are saying thanks for the memory. We have the latest from Micron's earnings and the ripple effect being felt in the price for consumer products. For Thursday, June 25th, it's BrewMarketsDaily and it's on holiday. I'm John Grittis.

More market details to come. But first, a trip down memory lane that wraps up at Xbox. More on that in a moment. All week, the markets were yearly awaiting earnings out of Micron, a trillion-dollar U.S.-based memory manufacturer. Investors were wondering what a look at the company's books might indicate about the durability of massive AI spend. Well, some of those questions were answered last night after the bell when Micron reported third quarter earnings.

The blockbuster numbers were even better than expected and MU shares rose nearly 20% this morning before settling in closer to a 15% rise on the day. Some of the details inside that earnings report. Revenue in the quarter more than quadrupled from the previous year, hitting $41 billion and exceeding expectations. And for the current quarter, the company raised its forecast to $50 billion, which is nearly five-fold the amount brought in a year ago.

But perhaps the most consequential disclosure from the earnings call wasn't the revenue number. It was the structure of 16 long-term contracts that Micron signed with data centers, hyperscalers, and automakers. Micron has locked in approximately $100 billion in minimum contracted revenue over the next three to five years. And $22 billion of that is already showing up as upfront customer cash.

In other words, customers like Microsoft, Amazon, Google, they're paying Micron now to guarantee that they get memory later. And this is an important shift. The memory chip industry has a long history of boom-bust cycles, massive demand, capacity ramps up, supply floods the market, prices crash, factories sit idle, and the cycle starts over. But today, Micron is locking in margins even if demand weakens. But here's the rub for consumers.

The AI boom is consuming so much memory that there's mounting supply pressures on components for smartphones, PCs, and all the devices that we use every day. So just a few hours ago, Apple announced it's...

Micron’s Memory Crunch Hits Consumers & Alexa+ Goes Shopping

Transcript

Built for investment professionals

Every day you wait, your competitors are finding
edge in conversations you're not hearing.

Micron’s Memory Crunch Hits Consumers & Alexa+ Goes Shopping

Transcript

Built for investment professionals

Every day you wait, your competitors are findingedge in conversations you're not hearing.

Every day you wait, your competitors are finding
edge in conversations you're not hearing.