Micron’s Record Earnings: How Long Can the Memory Boom Last?

By Stock Titan Editorial Team · Published October 1, 2026

Analysis Earnings earnings fundamental-analysis valuation MU

Micron’s fiscal Q4 2026 results in numbers

Micron’s fiscal fourth quarter ended on September 3, 2026, and the results release filed with the SEC shows revenue of $54.23 billion against $41.46 billion in the previous quarter and $11.32 billion a year earlier. GAAP net income was $37.70 billion, or $32.87 per diluted share, and non-GAAP earnings were $33.42 per share. Analysts polled by LSEG had expected $31.61 per share on revenue of $51.07 billion, according to CNBC. Other data providers published slightly different consensus figures, so the comparisons here use LSEG throughout. The full release is also on Micron’s StockTitan news page.

For the fiscal year, revenue came to $133.19 billion against $37.38 billion in fiscal 2025, and GAAP earnings per share to $74.33 against $7.59. Chief financial officer Mark Murphy put non-GAAP earnings per share for the year at $75.52 on the earnings call, and chief executive Sanjay Mehrotra said DRAM revenue alone passed $100 billion for the year.

Most of the growth came from prices. DRAM, the working memory used in servers, PCs and phones, brought in a record $39.8 billion in the quarter, 73% of revenue, up 343% from a year earlier and 27% from the previous quarter, with bit shipments up by a mid-single-digit percentage and prices up in the high teens, per Murphy. NAND, the storage memory in SSDs and phones, brought in $14.1 billion, up 526% on the year, with bits up about 10% and prices up about 30% in the quarter.

Among the business units, the Core Data Center unit grew to $18.0 billion, about 11 times its size a year earlier, which is the "11-fold" jump in CNBC’s headline. The Cloud Memory unit, which carries high-bandwidth memory (HBM, the stacked DRAM placed next to AI accelerators), grew 18% from the previous quarter to $16.3 billion and had the lowest gross margin of the four units, 83% against 84% to 90% for the others. Mehrotra said HBM revenue itself grew faster than the company’s total revenue, which rose 31% in the quarter, so the unit’s slower growth came from its other products. Micron did not give an HBM revenue figure.

Mehrotra also said the company had agreed most of its 2027 HBM supply "with significant price increases year-over-year, narrowing the gross margin gap with conventional DRAM", which implies that ordinary DRAM is, for now, the higher-margin product.

Cash moved in step with profit. Operating cash flow was $43.97 billion in the quarter and $89.68 billion for the year, and the release puts adjusted free cash flow at $33.2 billion and $62.3 billion. Micron ended the quarter with $73.48 billion of cash and investments and $5.18 billion of debt, which Murphy described as net cash of $68.3 billion.

That figure includes $12.7 billion of customer deposits tied to long-term agreements. Micron books them under financing activities, so they do not count toward free cash flow, and, as the contracts section explains, the money goes back to customers later in each agreement if they meet their minimum purchases. Net capital spending was $10.77 billion in the quarter and $27.37 billion for the year. The quarterly history is on Micron’s StockTitan financials page.

Why Micron stock barely moved after earnings

Micron shares closed at $1,065.11 on September 30, three cents above the previous close, before the results came out after the bell. Nasdaq’s after-hours trade records show the stock about 1.7% higher at 4:28 p.m. ET, shortly after the release, and about 1.2% lower at 5:29 p.m., while executives were taking analysts’ questions, and it ended extended trading at $1,069, up 0.37%. On Thursday morning it was down roughly 0.5% to 1% in pre-market trading shortly after 8 a.m. ET. The options market had been prepared for much more, pricing a move of about 7.4% in either direction according to EarningsWatcher and about 8% according to SpotGamma.

Part of the explanation is how far the stock had already gone. Based on Nasdaq’s historical closing prices, the shares were up 537% from $167.32 on September 30, 2025, and up 273% since the end of 2025.

The stock had also recovered sharply in the weeks before results. After a record close of $1,213.56 on June 25, it fell 39% to $739.00 by July 29, then climbed 44% from there, including 11% between the end of the quarter on September 3 and the report itself. Some analysts raised their targets ahead of the numbers, Baird to $1,520 from $1,280 on September 28 and Citi to $1,300 from $1,150 on September 23, while Wells Fargo cut its target to $1,400 from $1,525 the same day, according to MarketBeat’s ratings history. After a run like that, even a clear beat can be largely priced in.

The report itself also carried a few details that point in a more cautious direction than the headline numbers:

• The gross margin forecast for the current quarter, about 86.25% non-GAAP, is below the 87.0% just reported. Murphy said he anticipates "fiscal Q1 to be the floor for gross margins in fiscal 2027", put it down to roughly $1 billion of higher costs, mostly incentive pay absorbed into inventory, and expects higher margins after that "with a more moderate rate of price increases."
• Net capital spending should be about $11.5 billion in fiscal Q1 and about $25 billion in the first half of fiscal 2027, against $27.37 billion for all of fiscal 2026, Murphy said, with more in the second half and construction growing faster than equipment. He gave no full-year figure and did not confirm an analyst’s estimate of more than $50 billion.
• Inventory rose to $10.4 billion, or 129 days of supply, nine days more than in the previous quarter.
• Mehrotra said servers are taking on memory at "a modestly lower rate of content growth than prior expectations" (in plain terms, a little less memory per machine than customers had planned), although he still expects server unit growth in the high teens in both 2026 and 2027.
• He said PC and phone industry revenue should still grow this year on premium models, "despite potential double-digit overall unit declines in both markets."

Taken one at a time these are small changes, and the analysts who updated their views on October 1 all kept Buy ratings. Rosenblatt raised its target to $1,900 from $1,500, D.A. Davidson to $2,100 from $2,000 and Mizuho to $1,400 from $1,300, while J.P. Morgan, BMO, RBC, Stifel, Needham and TD Cowen kept theirs, according to StockAnalysis’ ratings and forecast pages on the morning of October 1, when the average target across 49 analysts polled by S&P Global stood at about $1,534.

One more item from the call matters for anyone doing per-share math. Murphy said Micron intends to increase its capital return from December 9, 2026, the second anniversary of its definitive CHIPS Act agreements, and that "over time, we expect to return 100% of our excess cash to shareholders," mainly through share repurchases. The current buyback authorization stands at $2.2 billion, and Murphy said investors can assume that "we will seek additional authorization in the near term."

Micron’s P/E ratio and the memory cycle

At the September 30 close Micron traded at 14.3 times its last twelve months of GAAP earnings, per StockAnalysis. Analysts expect non-GAAP earnings of $161.49 per share in fiscal 2027, which ends in late summer 2027, and $181.98 in fiscal 2028, according to the S&P Global consensus shown by StockAnalysis, which puts the stock at 6.6 times fiscal 2027 earnings and 5.9 times fiscal 2028 earnings (the arithmetic is easy to check with our P/E ratio calculator). Revenue grew to 3.6 times its fiscal 2025 level, so all of these multiples are calculated on earnings close to a record.

Measures based on assets and cash flow tell a different story. The same StockAnalysis page shows a market value of $1.20 trillion and an enterprise value of $1.13 trillion, with the shares at 8.7 times book value and 20.4 times the last twelve months of free cash flow (19.2 times on an enterprise-value basis). Free cash flow there takes $30.7 billion of gross capital spending, before $3.3 billion of government incentives, out of $89.7 billion of operating cash flow.

A low P/E on a memory maker needs to be read with the cycle in mind. Memory prices can move very fast. TrendForce forecast a rise of 90% to 95% in conventional DRAM contract prices for the first quarter of 2026, Micron’s DRAM prices fell about 30% in fiscal 2019, and Micron’s profits follow those prices up and down. Investors tend to pay for what they think the company will earn over a whole cycle, which can leave the P/E at its lowest when earnings are at their highest. Trefis made the same point about Micron in June, writing that at under 10 times next year’s earnings the stock "may look inexpensive," but may be "far less of a bargain" if those earnings are peak-cycle profits.

Micron’s own record from the last cycle shows how this played out. The trailing P/E stood at 12.6 at the end of the quarter on December 2, 2021, and 11.1 at the end of the quarter on March 3, 2022, per StockAnalysis’ quarterly ratios. In between, on January 14, 2022, the stock set a closing high of $97.36. By September 26, 2022 it had closed at $48.88, a fall of 49.8%, and the trailing P/E measured at the quarter end of September 1, 2022 was 7.3. A falling stock with a falling P/E is consistent with a market that expects earnings to fall before they do, and in that cycle they did.

The 2018 and 2021 memory busts, quarter by quarter

Micron’s GAAP gross margin of 86.8% in the latest quarter (87.0% on a non-GAAP basis) is far above anything it reached in earlier upcycles. The fiscal 2018 boom peaked at a 61.0% GAAP gross margin in the fourth quarter of that year, per the fiscal Q4 2018 release, and the next upcycle peaked at 47.3% in the quarter that ended in early September 2021, per the fiscal Q1 2022 release. The table follows the GAAP gross margin quarter by quarter after each peak, using Micron’s own results releases; where a release printed dollar amounts but no percentage, we divided gross margin by revenue.

The two downturns took different routes to a similar place. In 2018 the slide started almost immediately, and the margin was below half its peak four quarters later; fiscal 2019 earnings per share fell 52% to $5.51 from $11.51 and revenue fell 23%, per the fiscal Q4 2019 release. Micron’s fiscal 2019 annual report said DRAM sales fell 28% that year, with average selling prices down about 30% because of "supply and demand imbalances, customer inventory corrections, and CPU shortages."

In 2021 the margin held near the top for three quarters and then collapsed, reaching negative 32.7% six quarters after the peak, per the fiscal Q3 2023 release. Fiscal 2023 revenue fell 49.5%, the gross margin for the year was negative 9.1%, and Micron lost $5.83 billion, per the fiscal Q4 2023 release.

Daniel Sparks summarized the pattern for The Motley Fool on September 27, noting that both times, once the slide began, the margin "gave up more than 30 percentage points within about a year." SK hynix went through the same thing. It closed 2018 with a 52% operating margin and 20.84 trillion won of operating profit, per its 2018 results, and earned 2.71 trillion won in 2019, a fall of 87%, per its 2019 results.

The share price tended to move first. In the 2021 cycle the stock’s 49.8% fall from January to September 2022 happened while the most recently reported gross margin was still above 46%, and the margin only broke down in the quarters that followed. In the 2018 cycle, Micron’s fiscal 2018 annual report lists a highest close of $62.62 in the March to May 2018 quarter, before the margin peak in August, and Trefis puts the fall from peak to trough in 2018 and 2019 at 57%. The stock has also halved outside a classic bust, falling 57.8% from a $153.45 close on June 18, 2024 to $64.72 on April 4, 2025, based on Nasdaq’s historical prices.

The new-fab calendar, 2026 to 2030

New supply has played a part in past memory downturns, alongside customer inventory corrections, and the factories that could end the current shortage already have published start dates. TrendForce estimates that DRAM supply falls short of demand by about 1% to 2% in 2026 and that the gap widens in 2027, because construction, equipment installation and materials "will delay meaningful production ramp-ups until the second half of 2027," with "substantial output contributions" not expected until 2028, per its July 30 report. The same report expects NAND to loosen first, in the second half of 2027. SemiAnalysis models a larger gap, a high-single-digit percentage shortfall this year widening to the low-to-mid teens next year, in its June 23 analysis of CXMT.

Micron’s own view on the call was more emphatic. Mehrotra said he expects supply and demand to be "much tighter in calendar 2027 and 2028 than they were in 2026," that industry DRAM bit shipments should grow by roughly the low 20s in percentage terms in both years while staying supply constrained, and that "we do not have line of sight to when supply and demand will return to balance." He also said a majority of customer discussions are already about 2028.

Most of the new capacity is already being built, and the dates below are the ones the companies or the Korean press have given. The first equipment going into a cleanroom usually comes several months before real output, so treat each date as the start of a ramp.

SemiAnalysis turned those projects into yearly wafer additions. It expects Samsung, SK hynix, Micron and CXMT to add roughly 190,000 wafer starts a month of capacity in 2026, 270,000 in 2027 and 395,000 in 2028, with Samsung going from 15,000 to 50,000 to 110,000, SK hynix from 60,000 to 60,000 to 90,000, Micron from 30,000 to 90,000 to 115,000, and China’s CXMT adding 85,000, 70,000 and 80,000. That makes 2028 the biggest single year of new capacity in the estimate, and Micron the largest single contributor that year, at 115,000. SemiAnalysis also expects CXMT’s share of global DRAM bit shipments to rise from 9% in 2025 to 12% in 2027, and its wafer capacity to reach about 17% of global DRAM supply by the end of 2028.

Headlines saying Samsung will roughly double its DRAM output need some unpacking. They come from a Korea Economic Daily report, summarized by BigGo, that puts two new mega-fabs at a combined 600,000 wafers a month once fully built, close to the 650,000 wafers a month of DRAM capacity Samsung has today. Those fabs will also make HBM, NAND and chips for other companies, the second one only starts production in 2029, and a TrendForce news report from August 20, citing Business Post, put final completion of the P5 phases in 2030 and, citing Seoul Economic Daily, said large-scale new supply is expected to remain limited before 2028. Samsung’s extra DRAM is coming, then, but over several years, and it will be only part of that 600,000.

Long contracts, deposits and price ceilings

The case that this cycle will end differently rests mostly on contracts. Mehrotra said Micron has signed 26 strategic customer agreements (SCAs), multi-year take-or-pay contracts that he estimates will make up more than 35% of revenue through 2030, with some now running into 2031. Murphy said the remaining performance obligations on the agreements that have a set pricing framework, the contracted value Micron still has to deliver, stand at about $150 billion, calculated on committed volumes and minimum prices and therefore, in his words, "inherently conservative." Mehrotra called the visibility these contracts give "a fundamental change to the nature of this industry."

Mehrotra also said more than 75% of Micron’s 2027 output is already committed, and when an analyst asked, he made clear that this includes customers without an SCA. It is a statement about volume, though. Micron has not said how much of that committed volume has fixed or bounded prices, or where the floors are.

Pricing is where the contracts cut both ways. Three quarters of the revenue Micron expects from its SCAs comes with a defined pricing framework, "a majority of which have pricing bands with floor and ceiling prices," and the remaining quarter is repriced every so often at market rates. A floor helps Micron if prices fall, and a ceiling means it gives up some of the upside if they keep climbing. TrendForce has seen the ceilings from the other side of the table, noting in its August 25 report that some long-term agreements signed since the second quarter of 2026 "have included price ceilings," and its fourth-quarter outlook expects some suppliers’ price increases to "lag the market average" because of them.

Mehrotra said financial commitments from customers under the agreements have reached $32 billion, "the vast majority of which are cash deposits." The cash actually received is smaller so far, $12.7 billion at the end of the quarter, and Murphy said the deposits "will be returned to customers over time towards the latter half of each agreement's term, assuming minimum purchase requirements are met." Micron reports them in financing cash flow, so they do not count toward free cash flow. Murphy also repeated, from the previous quarter’s call, that "even at floor prices, we expect margins meaningfully above any prior cycle peak margins," a claim outsiders cannot test while the floor prices stay private.

Long contracts and prepayments are not new to memory either, although their size is. In 2005 Apple agreed to prepay $1.25 billion for flash memory to five suppliers, including $250 million to Micron, according to Apple’s announcement and Micron’s filing. At the 2018 peak, Micron carried $235 million of customer advances, which had fallen to $61 million a year later, per its fiscal 2019 annual report. In fiscal 2026 alone it took in $12.7 billion.

Morgan Stanley analysts wrote in July that past long-term agreements in memory were either renegotiated or left customers holding unwanted inventory, according to a BigGo summary of the report; the original note is not public, so that is a paraphrase of a summary. Micron is not the only supplier taking deposits. A J.P. Morgan estimate summarized by BigGo has SK hynix locking in more than half its capacity through long-term agreements, with prepayments of 20% to 25% of contract value.

Post-boom earnings and today’s share price

Another way to look at the stock is to ask what level of steady earnings after the boom would be consistent with today’s price, under a simple set of assumptions. We ran that calculation with public inputs. It is an illustration, and the result moves with every assumption in it.

• Start from net cash of $68.3 billion and subtract the $12.7 billion of customer deposits that are due to be returned, leaving about $55.6 billion.
• Assume Micron earns the consensus $161.49 per share in fiscal 2027 and $181.98 in fiscal 2028 on about 1.15 billion diluted shares (the share count in Micron’s guidance), adds about $10 billion a year of depreciation and other non-cash items, spends $55 billion a year on equipment and buildings, and keeps the rest as cash.
• Value whatever it earns from fiscal 2029 onward at 10 or 12 times earnings, close to the trailing multiples of 11 to 13 that Micron traded at near the top of the last cycle, and at 8 times as a more cautious case.

Under those assumptions Micron would hold about $361 billion of cash by August 2028, roughly $314 a share. The remaining $752 of the share price would need steady earnings of about $63 a share at 12 times, $75 at 10 times or $94 at 8 times, every year after the boom. If fiscal 2028 earnings instead fell back to the fiscal 2026 level, the cash pile would be smaller and the earnings needed afterwards larger, about $72 to $107 a share. Discounting that August 2028 value back to today at 10% a year, which a fuller valuation would do, raises the steady earnings needed at 10 or 12 times to roughly $80 to $107 a share.

For comparison, Micron earned $74.33 a share under GAAP in fiscal 2026. Before this boom its record year was fiscal 2018, at $11.51 a share per the fiscal Q4 2019 release, and the 2022 peak year brought $7.75, per its fiscal Q4 2022 release. So under these assumptions, today’s price is consistent with steady post-boom earnings of roughly $63 to $86 a share at 10 to 12 times, before discounting, around the fiscal 2026 level and roughly 5.5 to 7.5 times Micron’s record year before AI demand arrived, and well below the $161 to $182 that analysts expect for the next two years.

The bill for expensive memory

Micron’s margin is somebody else’s cost. The most visible pressure point is the AI infrastructure chain, where Nvidia and other accelerator makers buy high-end memory such as HBM and the cloud companies pay for much of it in the end through their AI budgets. Nvidia was explicit about the cost on its August 26 earnings call. Chief financial officer Colette Kress said memory prices had exceeded the company’s expectations and "are headed even higher into next year," guided gross margin to 74% for the third quarter, and said margins would "bottom in Q4 in the 71% to 72% range before settling at 72% to 73% in fiscal year '28," once Nvidia’s own price increases take effect.

Nvidia’s CFO commentary filed with the SEC shows supply commitments rising from $119 billion to $279 billion in one quarter, "primarily related to the procurement of memory." Kress also said Nvidia expects revenue to grow about 70% in fiscal 2028 and called it "a supply-constrained outlook." Nvidia’s figures are on its StockTitan overview page.

Micron gets only part of that spending. In the second quarter of 2026 SK hynix held 50% of HBM revenue, Samsung 33% and Micron 18%, according to Counterpoint data reported by Seoul Economic Daily. In DRAM overall, TrendForce put Samsung at 39.4% of revenue, SK hynix at 24.9% and Micron at 23.3% in the same quarter, with Micron’s DRAM revenue up 65.5% from the previous quarter against 63.4% at Samsung and 37.9% at SK hynix, as it "continued to prioritize higher-priced server DRAM." Mehrotra said Micron is working with Nvidia on "the industry's first custom HBM4E implementation," to be used in Nvidia’s next generation of GPUs.

The cloud companies are paying too. TrendForce estimates that DRAM and NAND will take 47% of major cloud providers’ capital spending in 2026 and 68% in 2027, as rising contract prices, particularly for HBM, combine with higher bit supply, and that HBM contract prices could still rise by 70% to 140% in 2027, per its August 25 report. That is a large share of cloud capital spending going to memory, and it ties Micron’s revenue directly to how long those budgets keep growing.

Consumers are where demand is already giving way. IDC expects smartphone shipments to fall 16.7% in 2026 to just over 1 billion units, with memory costs "up over 300% YoY" and the average phone price rising 27.6% to $581, per its August 26 forecast. Counterpoint expects a 14.3% decline, extending into 2027. For PCs, IDC’s June forecast called for an 11.3% drop in 2026. Intel chief executive Lip-Bu Tan said in mid-September that memory prices had risen five- to sevenfold and that projects were being delayed for lack of memory, according to Seoul Economic Daily.

Any pushback on price would have to come from these buyers, and some of it already shows in phone and PC shipments. Software could add to it. DeepSeek’s V4.1-Flash, described in a paper posted on September 17, keeps roughly a quarter as much cache in HBM per token as the version before it and an eighth as much on SSD or host memory, according to its technical paper. That cache is the slice of an AI system that holds a conversation’s context, so the saving is real but narrow, and on its own it says nothing about total memory demand. Mehrotra’s view, given when an analyst asked about reports that one large customer was de-speccing HBM (designing in less of it), is that such optimizations "also have diminishing return."

Signals that would show the memory cycle turning

The figures above point to a list of things to check, each with a recent reading, starting with the contract price path. TrendForce’s quarterly forecasts for conventional DRAM contract prices went from an increase of 90% to 95% in the first quarter of 2026 (February 2) to 58% to 63% in the second (March 31), 13% to 18% in the third (July 3) and 10% to 15% in the fourth (September 30). Prices are still rising, at a much slower pace, which matches Murphy’s "more moderate rate of price increases."

Most of these will update on a known calendar. TrendForce publishes its contract price forecasts around the start of each quarter, the large cloud companies report quarterly results in late October, Nvidia reports its fiscal third quarter in November, and Micron’s fiscal first quarter ends in early December. That report is where Micron’s "floor" for gross margin gets its first test. Micron’s filings and press releases will appear on its StockTitan SEC filings page and news feed as they come out.

Frequently asked questions

The information provided in this article is for educational and informational purposes only. It does not constitute financial advice, investment recommendation, or an endorsement of any particular investment strategy. Past performance does not guarantee future results. Investors should conduct their own research and consult with a qualified financial advisor before making investment decisions.

See more from StockTitan in Google Search and AI answers. Adds StockTitan as a preferred source · opens Google

Add on Google Not now