Updated version 2 - As artificial intelligence deployment continues to deepen, 3M raises its profit forecast and its stock price rises.

Paragraph 7 adds details from analysts' conference calls, and the article is interspersed with background information about the Amazon partnership and AI-related business

Nandan Mandayam

Reuters, October 20 - 3M (MMM.N) on Tuesday raised its 2026 earnings outlook. The previous day, the company had expanded its data center collaboration with Amazon (link), indicating a growing focus on products and services related to artificial intelligence, driving up the industrial group's stock price by nearly 5%.

Strong industrial activity in the US, combined with increased sales of chip manufacturing equipment and materials fueled by the AI boom, helped the company offset demand fluctuations in some end markets impacted by inflationary pressures.

3M's raised forecast was driven by strong sales to chip manufacturers and price increases that supported margins—as major tech companies step up investments in data center infrastructure to achieve their AI ambitions.

Announced on Monday, the deal also allows Amazon's subsidiary over the next seven years to purchase $521 million worth of 3M shares as it sources more data center components.

Despite persistently weak demand from automotive and consumer electronics customers, growth in data center and semiconductor-related markets has become a key highlight, effectively alleviating some of the traditional end markets' weakness.

3M supplies electrical components for the external parts of data centers, as well as expanded beam optical (EBO) connectors, which are non-contact connectors used inside data centers. Its EBO clients include hyperscale AI service providers such as Amazon Web Services (AWS) and Microsoft Azure.

CEO William Brown, on the earnings call, projected that EBO business sales (a small portion of data center revenue) will double from about $40 million expected this year to between $80 million and $100 million by 2027.

The company, renowned for products like "Scotch" tape and "Post-it" notes, reported adjusted quarterly revenue of $6.6 billion, up 4.2% year over year.

According to data compiled by LSEG, its quarterly adjusted earnings per share reached $2.50, higher than the market expectation of $2.38.

The company expects full-year adjusted earnings per share to be between $9.10 and $9.15, compared to its earlier forecast of $8.80 to $8.95.

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