Micron announced record-breaking results yesterday.
A year ago, its quarterly revenue was $11.32 billion. Now? $54.23 billion. And net income? It went from $3.2 billion to $37.7 billion.
And here comes the most interesting part. Morgan Stanley analyst Joseph Moore put it very well shortly before the results were released. The question is no longer "how well can it do?" It is "how long can it last?"
THE NUMBERS THAT LEFT WALL STREET SPEECHLESS
In the quarter that ended on September 3, Micron generated $54.23 billion in revenue, while analysts were expecting $51.07 billion. Earnings per share reached $33.42, compared with estimates of $31.61. In other words, revenue jumped 379% year over year!
"And where did all that money come from?" you might be wondering. Mainly from DRAM, the general-purpose memory market. DRAM revenue reached $39.8 billion, up 343% from last year. That represents 73% of total sales.
Breaking it down by segment, Core Data Center generated $18 billion, while Cloud Memory brought in $16.28 billion, up from $13.77 billion in the previous quarter. Mobile & Client generated $13.11 billion, while Automotive & Embedded generated $6.82 billion.
Operating income reached $43.75 billion. And cash flow from operations? $43.97 billion, compared with just $5.73 billion last year.
But the most impressive figure of all is the gross margin. 87%. What does that mean? For every $100 in sales, the company keeps $87 after covering the cost of production. Analysts were expecting 86.2%.
THE NEXT QUARTER
And this is where things get even more interesting. Micron also provided guidance for the first quarter of fiscal 2027, which runs through November.
It expects revenue of around $61.5 billion, with a range of $60 billion to $63 billion. Analysts were expecting $57 billion. For earnings per share, it sees approximately $38.15, with a range of $37.15 to $39.15. The estimate was $35.40. That means even the company's most conservative guidance is above what analysts were expecting.
Micron CEO Sanjay Mehrotra was clear: "We achieved record results in fiscal 2026 and expect an even stronger 2027." According to him, artificial intelligence is evolving into "Superintelligence." And memory is powering that intelligence, as well as the competitiveness of its customers. That is why the company is increasing its investments in technology, products, and manufacturing. As he noted, strategic agreements with customers provide additional confidence that the strong performance can continue.
WHY EVERYONE WANTS MEMORY
"And why does everyone suddenly want memory chips?" you might be wondering. To understand that, we need to talk about HBM.
What is that? In very simple terms, it is high-bandwidth memory, built from stacks of DRAM. Nvidia and AMD's advanced chips increasingly need it to run artificial intelligence workloads. The problem? The world's biggest producers cannot make enough of it. And Micron is the only U.S. company producing it.
And this is exactly where pricing comes into play. Seeking Alpha's Luca Socci observed that the growth came from prices rather than volume. Cost of goods sold increased by only 4%. In other words, customers are paying more for the same quantity. Why? Because memory has become the bottleneck for artificial intelligence.
And as if that weren't enough, the shortage is reaching consumers as well. The cost of memory has surged, pushing up prices for Apple's iPad and MacBook. There are shortages even in laptops and gaming consoles.
That is why Micron is investing $250 billion in two new HBM manufacturing complexes. The larger one began construction in January in Clay, New York. The first new factory, in Boise, Idaho, is scheduled to begin operations next year. At the same time, competitors are building as well. SK Hynix and Samsung are setting up massive factories in South Korea. Micron has the smallest HBM market share among the three. And yet, its market capitalization has surpassed $1.2 trillion.
Of course, not everything is rosy. The memory industry is known for its boom-and-bust cycles. That is why companies are locking in more and more long-term contracts. Still, SK Hynix's CEO expects the memory shortage to continue beyond 2030.