Micron Earnings Lift Memory Stocks
Micron earnings and SanDisk results signal AI-driven DRAM and NAND price gains and wider margins, tightening supply and prompting trader reallocation.
KEY TAKEAWAYS
- Micron reported Q2 revenue $23.9B and non-GAAP EPS $12.20 with gross margin 74.4%.
- SanDisk reported $6.0B revenue and $1.5B data-center sales with gross margins near 65-67%.
- DRAM contract prices rose about 90% and NAND about 50%, and shortages are expected through 2028.
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Micron Technology (MU) and SanDisk (SNDK) reported sharp revenue and profit gains in their latest quarters as AI data-center demand pushed DRAM and NAND contract prices higher and expanded gross margins, reshaping supply dynamics across memory markets.
Earnings and Margins Surge
Micron reported fiscal second-quarter 2026 revenue of $23.9 billion and non-GAAP earnings of $12.20 a share, up from $8.1 billion and $1.56 a year earlier. The gains were driven by AI data-center demand for DRAM, NAND, and high-bandwidth memory (HBM). Micron’s quarterly gross margin widened to 74.4%, compared with 36.8% a year earlier.
SanDisk’s fiscal third-quarter 2026 revenue reached $6.0 billion, a 97% sequential increase and a 251% year-over-year rise. GAAP net income was $3.6 billion, or $23.03 a share, while non-GAAP earnings were $23.41 a share. Data-center revenue surged 645% year-over-year to $1.5 billion, highlighting the company’s exposure to AI servers. SanDisk reported gross margins between 65% and 67% after spinning off from Western Digital in 2025.
On an annual basis, Micron posted $37.4 billion in revenue, a 26.2% operating margin, and $1.7 billion in free cash flow. SanDisk’s annual free cash flow was negative $120 million, with gross margins of 58.4% for Micron and 56% for SanDisk.
AI Demand and Supply Crunch
Contract prices surged in 2026, with DRAM rising roughly 90% and NAND about 50%. High-bandwidth memory allocations have been sold out for multiple quarters. Industry estimates project AI demand could account for more than half of the total addressable memory market this year, a shift described as an AI memory supercycle.
Micron’s chief executive said AI remains in an early stage and that scaling inference workloads will require both faster and larger amounts of memory. Supplies are tight and difficult to increase quickly, with shortages expected through 2028. Some forecasts anticipate the DRAM sector will meet only about 60% of demand by 2027 as HBM4 ramps.
Manufacturers are cautious about broad capacity expansion in 2026, focusing on technology upgrades and higher-value products. This shift has led to cuts in consumer-electronics supply and is expected to compress the global device market until supply recovers in 2027.
