Micron Guided to Record Revenue, but Its Margin Forecast Fell Short

Micron released results at 4:01 p.m. ET on September 30. Revenue of $54.23B came in $4.23B above its $50B target.

It guided first-quarter revenue to $61.5B and EPS to $38.15. Both are above expectations.

The stock slipped as much as 0.80% during the call ($1,056.63 at 5:56 p.m. ET), then ended the after-hours session up 0.37% at $1,069.00.

Micron Landed Above the Expectations Range

Revenue grew about fivefold from $11.32B a year earlier. Full figures are in our fiscal Q4 earnings analysis.

First-Quarter Guidance on a Weekly Basis

Micron's fiscal 2026 ran 53 weeks, and the extra week fell in the fourth quarter. That quarter had 14 weeks; the next one has 13.

In the headline, guidance looks 13% above the fourth quarter. On weekly pace, the rise is 22%.

What the Call Said: Pricing, Supply, Agreements

The preview asked two questions: are price increases slowing, and does supply stay tight beyond 2027?

The answer to the first is yes, but increases continue. CFO Mark Murphy said DRAM prices rose in the high-teens percentage range in the fourth quarter and NAND prices about 30%. For fiscal 2027, he pointed to "a more moderate rate of price increases."

On HBM, or high-bandwidth memory, 2027 pricing is largely locked in. CEO Sanjay Mehrotra said agreements cover the vast majority of 2027 HBM bit supply, with significant year-over-year price increases.

The answer to the second question is also yes. The company expects supply-demand conditions in fiscal 2027 and 2028 to be much tighter than in 2026. Mehrotra: "We do not have line of sight to when supply and demand will return to balance."

Strategic customer agreements rose from 16 in June to 26. They cover more than 35% of revenue through 2030, and customer commitments grew from $22B to $32B. Murphy put remaining performance obligations at about $150B.

Costs are growing too. Capex will be about $11.5B in the first quarter and about $25B in the first half, higher in the second. Operating expenses will rise by about $2.5B, and inventory rose 9 days to 129.

On demand, server units are expected to grow in the high teens in both 2026 and 2027. Data center SSD revenue was nearly $10B, more than 10 times the year-ago quarter.

Why the Margin Fell Short

Revenue guidance beat expectations by $4.5B. The stock stalled on a different number.

It was not the figure itself. It was the cost inside it.

Murphy said most of the fiscal 2026 incentive pay tied to manufacturing was absorbed into fourth-quarter inventory, which sells in the first quarter. Together with startup costs at new facilities and higher 2027 pay, that adds roughly $1B of cost in the first quarter.

Murphy framed the quarter as the year's low point: "fiscal Q1 to be the floor for gross margins in fiscal 2027." He expects margins to rise over the remaining three quarters despite slower price increases.

Why the Stock Stayed Put

Micron closed September 30 at $1,065.11, unchanged from the prior day. After hours it rose slightly at first, then gave that back as the call went on. TheStreet tied the 5:21 p.m. ET decline to the capex commentary.

It ended the after-hours session at $1,069.00, up 0.37%. That is about a twentieth of the 7.7% move options had priced.

If first-quarter EPS guidance held for four quarters, it would reach $152.6 a year. At this price the multiple is about 6.9. Morgan Stanley's Joseph Moore wrote that the debate has shifted from how good things can get to how long they can last, according to ZeroHedge.

JPMorgan had kept its Overweight rating and $1,540 target before the report. No post-call target changes had been published at the time of writing.

The sector reaction was limited. SanDisk was down 0.68% at 5:41 p.m. ET, Western Digital down 0.33% at 5:40 and Seagate down 0.04% at 4:47. Nvidia is the largest buyer of HBM.

Micron will step up capital returns from December 9, 2026, and aims over time to return 100% of excess cash. For the mechanics: Share Buybacks.

Knowing the Direction Was Not Enough for Options

In June the stock rose 15.7% close to close the next day. Details are in our fiscal Q3 analysis.

This time the after-hours move is under 1%. Once earnings uncertainty clears, option premiums deflate; this is called an "IV crush."

This is not a strategy recommendation. More: How Options Work · How to Read Earnings Day

Micron's last three months:

This article draws on Micron's September 30 fiscal Q4 press release (GlobeNewswire), its fiscal Q3 release and 10-Q filed with the SEC. It also uses earnings call transcripts from Benzinga and Investing.com and reporting from TheStreet and ZeroHedge. Prices come from StockAnalysis and Yahoo Finance; options data from GuruFocus and TipRanks is dated September 29. First-quarter consensus and the investor expectation range are secondhand; after-hours prices formed in thin trading. Call quotes were checked against two independent transcripts. Correction (September 30): "closed at $1,069.15, up 0.38%" → "closed at $1,065.11, unchanged"; the related 4:08 p.m. ET after-hours change was -0.06%, not -0.43%.

Updated: 6:00 p.m. ET — earnings call added.