New York, July 18, 2026, 12:12 (EDT)
- 3M closed Friday at $159.84, slipping 1.2% on the day, while advancing 1.5% over the week. Leading U.S. indexes finished the week lower.
- Microsoft NASDAQ:MSFT Azure is the initial hyperscaler to announce the deployment of 3M’s EBO connectors.
- Second-quarter earnings are due Tuesday. Early consensus expects adjusted EPS of $2.27 and revenue of $6.38 billion.
3M Company NYSE:MMM rose 1.5% over the past week following Azure’s validation of its optical connector technology. Investors are watching to see if Tuesday’s earnings will show the increase reflected in reported sales.
The internal data center segment brings in approximately $100 million per year, representing 0.4% of 3M’s projected $24.948 billion in 2025 sales.
The potential market is significantly greater. Chief Executive Bill Brown estimated the optical interconnect sector at over $2 billion, which is more than 20 times the current internal business.
U.S. cash markets did not open on Saturday. 3M closed Friday at $159.84, dropping 1.2% for the session. However, the stock rose 1.5% since July 10.
Microsoft announced on Wednesday that its Azure cloud platform will utilize 3M’s Expanded Beam Optical connectors. The companies said initial deployments helped reduce network rollout times in some settings.
Microsoft vice president Cliff Henson stated that the technology may accelerate deployment. He called the data centers “more resilient and ready for the scale of AI.” Source
Brown stated that 3M generates a minimum of $600 million in yearly revenue from data centers. Approximately $500 million comes from providing power infrastructure, while close to $100 million is related to equipment within data-center facilities.
The power-side segment is expanding at a rate between high single digits and low double digits. Brown stated the inside segment has increased by more than 50% every quarter. That smaller segment contains TwinX cabling and EBO optical products.
The split alters the investment case. Current exposure is mainly in electrical, while the highest growth is seen in the significantly smaller inside-data-center segment.
| Comparison | Revenue scale | Share of 2025 3M sales |
|---|---|---|
| Existing data-center-related segment | About $600 million | 2.4% |
| Existing inside-data-center segment | About $100 million | 0.4% |
| Initial estimate: 10% of reported optical market | Over $200 million | Over 0.8% |
| Initial estimate: 20% of reported optical market | Over $400 million | Over 1.6% |
The initial scenarios are based on the stated addressable market per year. These examples are illustrative only and do not represent company guidance. All percentages reference 2025 sales of $24.948 billion.
Optical sales would surpass $200 million with a 10% market share, more than doubling the current inside-data-center scale. However, this figure would still account for less than 1% of projected 2025 group sales.
Execution is more important than the size of the market. 3M claims EBO technology reduces connector plug-up time to 30 seconds from around three minutes.
Capacity remains the immediate bottleneck. 3M intends to more than double production, but Brown noted this could still be insufficient.
JPMorgan Chase NYSE:JPM analyst Chigusa Katoku upgraded 3M to Overweight on Friday, lifting the price target to $180 and stating growth was “taking hold.” TipRanks
3M Company is set to report its second-quarter figures on Tuesday ahead of the market open. Analysts surveyed by Zacks expect adjusted earnings per share of $2.27 and revenue of $6.38 billion.
Management previously forecast organic growth exceeding 3% for the quarter. The company continues to project adjusted earnings per share for the full year between $8.50 and $8.70.
Investors are set to monitor EBO orders, shipment schedules, and production capacity. Brown noted that certain first-quarter orders are scheduled for shipment in the second half.
Risks: Delays in production may postpone optical revenue. Soft consumer demand and oil-related expenses could offset the minor contribution from the unit.
Cash trading will restart Monday at 9:30 a.m. EDT. The report on Tuesday will indicate if Azure validation is starting to produce revenue.
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