Micron Technology delivered exceptional fourth-quarter results that far surpassed analyst expectations, with revenue reaching $54.23 billion, up 379% from $11.31 billion a year earlier. According to the company's latest earnings report, adjusted earnings of $33.42 per share also exceeded forecasts, while net income under standard accounting rules hit $37.70 billion, compared with $3.20 billion in the same period last year. The company's gross margin climbed to 87 cents of every sales dollar after production costs, a dramatic improvement from approximately 46 cents a year ago. Core Data Center revenue rose to $18 billion from $1.58 billion, while Cloud Memory brought in $16.28 billion, with demand from AI data centers lifting all four business units. Analysts had expected about $51.07 billion for the quarter ended September 3, meaning Micron cleared that estimate by more than $3.23 billion. The company is the largest memory chip manufacturer in the US and benefited from the AI building frenzy that fueled a 4x year-on-year revenue jump.
Micron's long-term contract strategy continues to strengthen its market position, with customers depositing $12.75 billion under long-term supply contracts during fiscal 2026, according to the company's latest filings. Most of this substantial deposit arrived in the final quarter, providing additional confidence in the company's financial performance. CEO Sanjay Mehrotra emphasized the strategic importance of these agreements, stating that "our Strategic Customer Agreements provide added confidence in the durability of Micron's financial performance." The company has secured approximately $100 billion through binding, multi-year HBM take-or-pay contracts, along with 16 strategic customer agreements representing more than $22 billion in commitments. These deals reduce reliance on volatile spot pricing and provide greater infrastructure-like revenue visibility, with much of HBM capacity booked through calendar 2027 and into 2028.
Micron provided robust guidance for fiscal first quarter 2027, forecasting revenue of $61.5 billion, plus or minus $1.5 billion, which significantly exceeded analyst expectations of $56.8 billion. The company's gross margin guide of about 86.25% sat slightly below the 86.4% estimate, but the overall outlook remains exceptionally strong. Baird analyst Tristan Gerra expects the trend of AI workloads increasingly involving systems that can perform tasks with less human intervention to continue into next year, supporting the optimistic outlook despite current market pressures. The company's EPS forecast of $38.15 also exceeded the $36.02 estimate, positioning it well for continued growth in the AI infrastructure market. Micron's DRAM revenue increased by 343% from the year-ago period to $39.8 billion*, contributing 73% of overall sales. The company is the only US-based manufacturer of high-bandwidth memory (HBM) and CEO Sanjay Mehrotra said they have a strong roadmap for future HBM products.
Despite the exceptional earnings beat, Micron shares fluctuated in extended trading between gains and losses, with the stock experiencing marginal decline after the company warned of a marginal decline in gross margins. According to CFO Mark Murphy in the earnings call, the decision to increase incentive compensation was a major factor behind this margin pressure. The company is investing $250 billion to build two new campuses to manufacture HBM, one in New York and the other in Idaho, which will come online next year. Shares of Micron have risen 240% so far this year and have surged 540% over the last 12 months, reflecting strong investor confidence in the AI infrastructure boom. Despite near-term weakness, financial services firm Baird raised its Micron price target to $1,520 from $1,280 and maintained its outperform rating, while D.A. Davidson analysts reaffirmed their Buy rating and maintained a $2,000 price target.
