October starts with a big number from Micron: $61.5 billion in projected quarterly sales. Memory buyers are signing longer contracts and paying more to secure supply. Nike gets its turn after the close, with a much less comfortable question: can it sell more shoes without leaning on discounts?

Also inside: Warner’s expected exit from the stock market, the latest AI deals, and the numbers to watch before tomorrow’s jobs report.

BEFORE THE BELL

October 1 · December futures · 5:58–5:59 a.m. ET · Delayed about 10 minutes. Changes as reported by Yahoo Finance.

THE BIG STORY · MU

Micron’s customers are paying up.

Thingreenline4546 / Wikimedia Commons. Taichung, 2023. CC BY-SA 4.0.

Micron reported $54.23 billion in fiscal fourth-quarter revenue after Wednesday’s close, up from $41.46 billion the previous quarter. Adjusted earnings reached $33.42 a share. The next-quarter sales forecast is $61.5 billion, plus or minus $1.5 billion. That is a quarterly target. For perspective, the company’s entire previous fiscal year produced $37.38 billion in revenue. The scale of the change is difficult to miss. The reported results and outlook.

Higher prices are doing much of the work. DRAM prices rose in the high teens from the previous quarter, while shipments increased by a mid-single-digit percentage. NAND prices climbed roughly 30%, against shipment growth of about 10%. Customers are buying more memory and paying more for each unit. That helps explain why profit can grow faster than production. Management’s operating breakdown.

The contracts are getting bigger, too. Micron has roughly $150 billion in remaining performance obligations, calculated from committed volumes and minimum prices. Customers have made $32 billion in financial commitments, mainly deposits. Those figures describe different things: future contracted sales and money committed to securing supply. Neither belongs on top of this quarter’s revenue.

Micron is also generating cash to fund the expansion. Quarterly operating cash flow reached $43.97 billion; adjusted free cash flow was $33.20 billion after $10.77 billion of net capital expenditure. That gives investors something more concrete than a full order book: cash available after investment.

The bill keeps growing. First-half fiscal 2027 capital spending is projected around $25 billion, with more in the second half. Next-quarter adjusted gross margin is forecast around 86.25%, versus 87% in Q4, partly because higher incentive-pay costs flow through inventory. Management expects margins to improve thereafter. Prices and margins will show whether demand keeps paying for that bigger factory footprint.

IN FOCUS · WBD / PSKY

Warner’s sale finally has a date.

Paramount’s Melrose Gate, 2014. Coolcaesar; crop by Cristiano Tomás / Wikimedia Commons. CC BY-SA 4.0.

For Warner Bros. Discovery shareholders, the long takeover saga now has a much more practical question: when does the cash arrive? Paramount Skydance and WBD expect the merger to close on October 6, following a judge’s approval of the settlement with 12 states. The companies announced the date on Wednesday evening; customary closing conditions still apply.

The payment is $31 a share in cash, plus a small daily amount for closing after September 30. If the deal closes on October 6, shareholders would receive about $31.0167 a share. WBD finished Wednesday at $30.95, before the evening announcement. The remaining gap was therefore only about seven cents against that expected payment. A closing delay or a failed deal would change that calculation.

Paramount shareholders face a longer assignment. Bloomberg reported roughly $52 billion of acquisition financing: $30 billion of investment-grade bonds, $12.4 billion of higher-yield bonds and $9.46 billion of loans. The longest-dated bond, due in 2066, carries a yield of almost 9%. Financing has been arranged, but it is expensive.

The combined group would bring HBO Max and Paramount+ under one owner, alongside two major studios and television networks including CNN and CBS. A larger library creates more options for licensing, subscriptions and bundles. It also creates a complicated integration job while borrowing costs keep running.

The settlement brings spending commitments of its own. Paramount pledged at least $1.5 billion of additional U.S. film-production spending over five years, plus annual theatrical-release requirements. That matters when weighing promised cost savings: combining companies does not mean every spending line can simply be cut.

The next phase will be judged through cash flow. Investors will want to see how much integration costs, where savings actually appear, and whether the streaming businesses can hold onto customers while the services change. WBD holders are approaching an exit; Paramount holders are getting a much bigger company to assess.

The closing date and shareholder payment · The financing · The settlement commitments

TONIGHT’S EARNINGS · NKE

Nike needs a cleaner recovery.

Brandon Carson; crop by Another Believer / Wikimedia Commons. Nike campus, 2010. CC BY 2.0.

Nike reports today at about 4:15 p.m. ET, followed by its call at 5 p.m. This is fiscal Q1 2027. The results are still ahead of us; tonight’s job is to separate a healthier business from a flattering headline. The company’s schedule.

The trouble was visible before last quarter. In fiscal Q3, ended February 28, Nike Direct sales fell 4% to $4.5 billion while wholesale rose 5% to $6.5 billion. Brand digital sales dropped 9%. Management said its turnaround actions would continue affecting results through the rest of the calendar year. Retail partners were providing support, but Nike had not restored demand across its own sales channels. Those are distinct parts of the recovery. The March results.

By Q4, ended May 31, wholesale was still growing: up 4% to $6.6 billion. Nike Direct fell 7% to $4.1 billion, with digital down 12%. These are year-over-year changes for each quarter, not a sequential comparison of seasonal sales totals. The split leaves tonight’s direct-sales numbers especially useful. The latest reported quarter.

Profit needs a similar cleanup. Q4’s 49.2% gross margin included about nine percentage points from an expected tariff recovery. The $986 million recovery also contributed $0.52 of the reported $0.72 in earnings per share. It improved the accounts without proving customers were buying more full-price shoes. Projecting that headline margin forward would give the turnaround too much credit.

Inventory adds another wrinkle. Its $7.5 billion dollar value was flat from a year earlier, but units increased, offset by a change in product mix. Flat inventory dollars therefore did not mean fewer items waiting to sell.

Tonight, look for direct-sales declines to narrow alongside cleaner inventory and less discounting. Moving more product through wholesalers helps; earning healthier margins when shoppers actually buy it would make the recovery more convincing.

THE STOCK BOARD

Where big tech finished

September 30 regular-session closes · USD · Daily change. Mag 7 plus AMD, Broadcom and Micron; our editorial watchlist.

Apple led this group; Meta was its biggest decliner. Micron’s close preceded its earnings release. Premarket trading is a separate session.

AI & BUSINESS · SNPS

Synopsys brings OpenAI into chip design.

Synopsys headquarters. Company press photo.

Synopsys gave investors two ways to think about AI on Wednesday: more custom chips need its design technology, and AI software could make engineers use those tools more often.

Its $1 billion-plus, multiyear agreement with Amazon combines licenses with royalties linked to chip production. That gives Synopsys a chance to keep earning as Amazon manufactures more chips using its technology. The royalty rate and annual revenue schedule were not disclosed, so the headline value cannot simply be dropped into next quarter’s sales.

The OpenAI partnership adds a different opportunity. OpenAI will license Synopsys’s design tools as the companies develop GPT-Synopsys, a specialized model intended to operate those tools. They also agreed to share revenue. If it works, AI-assisted engineering could bring Synopsys more paying usage. Early work with semiconductor customers is underway, but the companies have not disclosed the project’s eventual revenue contribution.

The financial targets provide something concrete to measure: fiscal 2027 revenue of $11.1–$11.2 billion, about 15% growth at the midpoint, and approximately $3.1 billion in free cash flow. Management also intends to repurchase about $1 billion of shares, subject to market conditions. The business case rests on customers using more of its technology as chip designs become more complicated.

AI & INFRASTRUCTURE · AMZN / CEG

Amazon signs up for 20 years of nuclear power.

Calvert Cliffs, 2005. Jbs666; white-balance edit by MutantMonkey / Wikimedia Commons. CC BY-SA 3.0.

Amazon is buying electricity on a much longer timetable than it buys chips. Its new 20-year agreement with Constellation covers 690 megawatts at Maryland’s Calvert Cliffs nuclear plant, including 190 MW of additional generating capacity expected between 2030 and 2032.

The agreement supports more than $3 billion in infrastructure investment. For Constellation, a long-term customer helps justify spending on upgrades and extending the plant’s operating life. Amazon gets more visibility into energy costs as its power needs grow. The electricity will still flow into the regional grid; this is not a plant being unplugged to serve one company. The Amazon–Constellation agreement.

A much larger proposal followed Wednesday evening. A U.S.–Korea framework calls for up to $120 billion of Korean investment in eight U.S. nuclear reactors, using Westinghouse and Korean technology. That brings Brookfield and Cameco’s Westinghouse exposure into the story, too. But the terms are explicitly non-binding and subject to final negotiations. It is a proposed construction pipeline, not $120 billion of revenue already secured. Brookfield’s announcement.

For investors, these announcements sit at different stages: an actual power-purchase agreement supporting an existing plant, and a framework for future reactors. Both show why AI spending reaches beyond semiconductor companies. The new generating capacity will take years to arrive.

MACRO IN A MINUTE

Inflation eased. Consumers kept spending.

August inflation gave investors some breathing room. Headline PCE rose 3.4% from a year earlier, with core inflation at 3.0%. Monthly core inflation was 0.2%. Spending kept growing: August purchases rose 0.9% in nominal dollars, or 0.6% after inflation. The BEA release.

Q2 economic growth was also revised to 2.2% annualized, from 1.5%. Cooler inflation alongside continued growth is a more comfortable combination for company earnings, although it does not settle the Fed’s next move. The GDP revision.

Today’s next checks: jobless claims at 8:30 a.m. ET and ISM manufacturing at 10 a.m. September’s jobs report follows tomorrow at 8:30 a.m. The release calendar.

PREDICTION MARKETS

Traders lean toward an October hold.

Kalshi’s September 30 update put an October Fed hold at 65%, versus 33% for a quarter-point hike. The hike probability had been 65% on September 25. Traders have sharply reduced the chance they assign to another increase around the October 28 decision.

A hold would leave rates unchanged; it would not deliver the relief of a cut. Tomorrow’s employment report gives traders another reason to revisit those odds. These are the dated market probabilities, not a Fed commitment or a live October 1 quote. The odds and explanation.

UPGRADES, DOWNGRADES & INITIATIONS

Three calls from the Street

Ally: Wells Fargo downgraded it from Overweight to Equal Weight and cut its target from $55 to $42.

Target: HSBC upgraded the retailer from Hold to Buy and raised its target from $125 to $190. Analyst Joe Thomas pointed to a recovery led by customer visits, making traffic the useful operating measure behind the call.

Arista: Bernstein began coverage at Outperform with a $250 target. This starts coverage; it is not an upgrade from a previous rating. All three calls were reported Wednesday. Ally · Target · Arista.

CRYPTO

Crypto snapshot

Bitcoin $83,621 · Ether $2,686 at 6:09 a.m. ET on October 1. Coinbase fell 1.90% and Strategy 1.02% in Wednesday’s regular session.

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