Overview
Newer Analysis:Q4 FY2026 · Sep 30
Since the Report − 11.2%
Revenue grew 346.0% year over year, EPS beat the estimate by 17.3%; the stock rose 15.7% in its first reaction.
- RevenueQ3
- $41.46B
- ▲ 346% YoY
- Gross Margin
- 84.6%
- +46.9 Pts YoY
Verdict
BUYMicron's revenue went from $9.30 billion to $41.46 billion in a single year, gross margin widened from 37.7% to 84.6%, and EPS of $25.11 beat by 17%. The stock rose 15.7% the next day; the real surprise was not the quarter but the $50 billion guidance where the market had penciled in $43.4 billion. From here, what matters is the pace of the HBM4 ramp and when the capacity the industry is adding turns the cycle.
Close on Report DayJun 24
$1,048.51▲ 15.7%Report-Day Move
- Market Cap(Today)
- ≈ $1.05 T
- 1Y Return(At Report)
- + 707%
- P/E(At Today's Price · $45.12 · Trailing 12M)
- 20.6
- Net Margin(Trailing 12M)
- 63.8%
Earnings Summary
In 30 Seconds- Revenue rose 346% year over year to $41.46B; adjusted EPS of $25.11 beat the estimate by 17%.
- The real surprise was guidance: the $50B revenue target topped the $43.4B market expectation by 15%.
- Shares rose 15.7% the day after earnings as guidance cleared expectations by a wide margin.
The Numbers
EPS (Non-GAAP)
$25.11
17% Above Expectation
DRAM Revenue
$31.3B
76% of Total · ▲ 343%
HBM4 Revenue
Over $1B
Ramp Twice As Fast As HBM3E
Q4 FY26 Guidance
$50B
Margin ~86% · EPS $31.00
Quarterly Revenue ($ Billion)
9.30
Q3 FY25 · $9.30 B
11.32
Q4 FY25 · $11.3 B · QoQ + 21.7%
13.64
Q1 FY26 · $13.6 B · QoQ + 20.6%
23.86
Q2 FY26 · $23.9 B · QoQ + 74.9%
41.46
Q3 FY26 · $41.5 B · QoQ + 73.7% · YoY + 345.7%
$49.0–51.0B
Q4 FY26 · $49.0–51.0B · QoQ + 20.6% · YoY + 341.9%
- Q3 FY25
- Q4 FY25
- Q1 FY26
- Q2 FY26
- Q3 FY26
- Q4 FY26
Q4 FY26 Guidance (Reported)
- Revenue49 – 51 billion49 billion51 billion49 – 51 billion
Midpoint 50.0 · Market Expectation 43.4Midpoint 15.2% Above Estimate ▲
- Earnings Per Share (Non-GAAP)30 – 32 $30 $32 $
Midpoint 31.00 · 25.11 in Q322% Above Expectation ▲
- Gross Margin86%
84.6% Actual in Q3 FY26+1.4 pts Expansion ▲
How to Read the Chart
The blue band is the company's low-high range; its length shows how much room the company left itself. The black triangle and the line beneath it mark where the market expected, and the notch in the band is the range's midpoint. The triangle appears only where a market expectation is known. When the company gave a single number rather than a range and no market expectation is known, that row gets no band at all: there is no length to measure and no position to compare. Axis is ±20% around the midpoint.
Segment and KPI Data
Revenue by Segment
- Cloud Memory$13.8 BShare 33.2%▲ 306.6% YoY
- Core Data Center$11.5 BShare 27.8%▲ 653.2% YoY
- Mobile and Client$11.5 BShare 27.8%▲ 254.0% YoY
- Automotive and Embedded$4.63 BShare 11.2%▲ 311.2% YoY
Key Metrics
Adjusted Free Cash Flow
$18.3 B
Press Release
Operating Cash Flow
$25.4 B
▲ 450.8% YoYPress Release
Net Capital Expenditures
$7.10 B
Press Release
Cash and Investments
$30.2 B
Press Release
Inventories
$8.57 B
Press Release
Shares are computed over the segment total: $41.4 B. Source: Press Release.
Metrics come only from the company's own filings; each one names the document it was taken from.
“Micron's record fiscal Q3 financial results and even stronger outlook for Q4 reflect the strategic value of memory in the AI era.”
- Memory in the AI Era
- Demand Keeps Exceeding Supply
- 16 Strategic Customer Agreements
Summary and Review
Summary
Micron reported its third quarter of fiscal 2026 after the close on June 24. It was the largest quarter in the company's history. Revenue reached $41.46 billion, up 346% from $9.30 billion a year earlier. Gross margin came in at 84.6%, an expansion of 46.9 points in a single year. Non-GAAP EPS of $25.11 beat the $21.40 market expectation by 17%. DRAM revenue alone was $31.3 billion, or 76% of the total. NAND stayed at $9.9 billion.
The stock closed the earnings day at $1,048.51 and rose 15.7% the next day to $1,213.56. It touched an all-time high of $1,255 intraday. The reaction came not from the quarter but from the guidance. The company guided to $50 billion of revenue and $31.00 of EPS. The market expected $43.4 billion and $25.50. That implies 21% more growth in three months and margin rising to 86%. The stock has since pulled back; the August 7 close was $877.57.
The quarter itself is close to flawless: every measure beat expectations and cash set a record. What separates Micron from the NAND and hard-drive players is growth coming mainly from DRAM and HBM. These products sit next to the AI accelerator, where supply is tighter. HBM3E and HBM4 capacity is sold out through 2027. The question is duration, not price. Fiscal 2027 capex will exceed this year's $27 billion. The stock's 30% slide from its peak prices that doubt.
Full Review
The engine of growth is DRAM, not NAND.
The most important detail of the quarter is where the revenue came from. DRAM revenue hit a record $31.3 billion, up 343% year over year, and made up 76% of total revenue. NAND revenue grew 361% to $9.9 billion but its share stayed at 24%. That split is what separates Micron from SanDisk and Western Digital in the same cycle. Their story is built on NAND and hard drives. Micron's engine is the DRAM inside the AI server. The CFO said DRAM prices rose in the low-60s percentage range and NAND prices in the mid-80s. DRAM bit shipments increased only in the low-single-digit range, NAND bits in the mid-single-digit range. Revenue more than quadrupled while the quantity shipped barely moved. Almost all of the increase came from price and mix. That is a structure that lifts margin fast but raises dependence on price by exactly the same amount.
The HBM4 ramp is twice as fast as HBM3E.
Micron said it has already booked over $1 billion in HBM4 revenue and that the 12-high HBM4 ramp is tracking twice as fast as HBM3E. The product is built on 1-beta DRAM and is in high-volume shipment for the lead customer's platform; qualification samples have also gone to multiple end customers. The next step is HBM4E on 1-gamma DRAM, with volume production planned for calendar 2027. The company noted that its 1-gamma DRAM and G9 NAND nodes are on track to become the highest-volume nodes in its history. On capacity the picture is unambiguous: HBM3E and HBM4 are fully booked through 2027, with demand spilling into 2028. Micron has also shipped 256GB DDR5 RDIMM qualification samples built on 1-gamma DRAM with advanced 3D die stacking to key server ecosystem enablers. HBM is the memory product that holds price best and has the fewest competitors.
Data center is running at $100 billion a year.
CEO Sanjay Mehrotra said data center revenue exceeded $25 billion in the quarter, an annualized run rate of more than $100 billion. In the business unit breakdown, Cloud Memory produced $13.77 billion of revenue at an 83% gross margin and Core Data Center $11.52 billion at an 87% gross margin. The Mobile and Client unit came in at $11.52 billion, exactly matching one of the data center units. Automotive and Embedded was the smallest at $4.63 billion and the lowest margin at 79%. Data center SSD revenue passed $5 billion and more than doubled sequentially. The real information here is concentration: roughly 61% of revenue now comes directly from the data center. That is a major advantage for as long as the cycle runs, and a one-way dependency when demand slows.
Strategic agreements build a price floor.
Micron announced it has signed 16 strategic customer agreements and said they will fundamentally transform its business model. Fourteen of the sixteen carry roughly $100 billion of cumulative revenue at minimum price. The company also projects it will receive $22 billion in cash deposits and related financial commitments under these agreements. This is not the usual structure in memory: traditionally price is set on the spot market and the producer has no protection when the cycle turns. Long-term agreements with minimum pricing put a floor under revenue in the downturn phase. The cash received up front also makes the $27 billion capital program easier to fund. It is the same logic as Western Digital's supply agreements stretching to 2031 in this same cycle; memory makers are trying to soften cyclicality by contract. Even so, agreements guarantee volume, not demand itself.
Margin is near its ceiling; capex is the real variable.
Gross margin rose to 84.6% and the company guides to about 86% for the new quarter. These levels have never been seen in memory and are approaching a mathematical ceiling. When only 14% of revenue is production cost, margin has little room left to widen. From here profit growth must come from volume rather than price, and volume depends on capacity. The CFO said full-year fiscal 2026 capital spending will reach approximately $27 billion. Quarterly capex in fiscal 2027 is expected to run higher, more than half of the increase from construction. Construction spending does not produce new bits in the near term. In memory's history, what ends a cycle is almost never demand stopping but the industry adding capacity. This is the number to track: new wafer capacity coming online across the industry. On valuation see the valuation guide; on position sizing, the risk management guide.
Looking Ahead
Strengths and Risks
6 Strengths · 6 RisksStrengths
6- DRAM revenue of $31.3 billion is 76% of the totalGrowth comes from a product tied directly to the AI data center.
- HBM4 revenue passed $1 billion in its opening phase and the ramp is running twice as fast as HBM3E.
- HBM3E and HBM4 capacity is fully sold out through 2027, with demand spilling into 2028.
- Gross margin of 84.6% compares with 37.7% a year ago, and roughly 86% is guided for the new quarter.
- Fourteen of the 16 strategic customer agreements carry roughly $100 billion of revenue at minimum price.
- Adjusted free cash flow of $18.30 billion funds the $27 billion annual capital program out of the company's own cash.
Risks
6- Almost all of the revenue increase came from price, with DRAM up in the low-60s and NAND in the mid-80s percentage range.
- With 86% guided, gross margin is approaching a mathematical ceilingProfit growth from here depends on volume.
- Fiscal 2027 capital spending will exceed $27 billionCapacity added across the industry could turn the cycle.
- 76% of revenue is concentrated in DRAMA price break in that single product group would hit the entire model.
- Data center accounts for roughly 61% of revenueAny pause in AI investment lands here directly.
- The stock has fallen roughly 30% from its June 25 peakThe market is pricing not the numbers but how long the cycle lasts.
What to Watch
6- September 21-22, 2026Fiscal Q4 results; guidance is $50 billion in revenue, ~86% gross margin and $31.00 in earnings per share.
- Fiscal Q4 — capital expenditure is expected around $10 billion and free cash flow above $30 billion.
- End of fiscal 2026Full-year capital spending is projected to reach approximately $27 billion.
- Calendar 2027Volume production of HBM4E, built on 1-gamma DRAM, is planned.
- Through 2027HBM3E and HBM4 capacity is sold out; agreements signed for 2028 are the next step in visibility.
- Fiscal 2027Quarterly capex rising above the fourth-quarter level, with more than half of the increase from construction spending.
Upcoming Earnings
To Understand This