Micron Earnings Show AI Demand Strength
Micron earnings lifted revenue and margins and raised first-quarter guidance tied to AI memory demand and large contracts, prompting traders to rebalance.
KEY TAKEAWAYS
- Fiscal Q4 revenue $54.2 billion; non-GAAP EPS $33.42 and gross margin near 87.0%.
- Guided fiscal Q1 revenue $61.5 billion +/- $1.5 billion and EPS $38.15 +/- $1.00.
- More than 75.0% of fiscal 2027 shipments committed under 26 strategic agreements; RPO about $134.0 billion.
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Micron Technology Inc. reported sharply stronger fiscal fourth-quarter 2026 results on Oct. 29, 2026, and raised fiscal first-quarter guidance as robust AI memory demand and large customer contracts tightened supply and supported higher margins.
Results and Guidance
Micron said fiscal fourth-quarter revenue reached $54.2 billion for the quarter ended Sept. 3, 2026, up about 379% year over year and 31% sequentially. Non-GAAP earnings per share were $33.42, with a non-GAAP gross margin near 87%, compared with roughly 45–46% a year earlier. Fiscal 2026 revenue totaled $133.2 billion, up about 256% year over year.
The company set fiscal first-quarter 2027 guidance for revenue of $61.5 billion plus or minus $1.5 billion, non-GAAP EPS of $38.15 plus or minus $1.00, and a non-GAAP gross margin of roughly 86.25%. Management linked the outlook to continued AI and data-center demand, constrained memory supply, and execution on high-bandwidth memory (HBM) products.
Customer Contracts and Capacity
More than 75% of fiscal 2027 shipments are committed under 26 strategic customer agreements extending through 2030. Customer commitments total about $32 billion, described as largely cash deposits held in a secondary account.
Micron’s fiscal 2026 Form 10-K showed remaining performance obligations of approximately $134 billion at that quarter-end, with about $13 billion recorded as contract liabilities. Roughly one-quarter of these obligations are expected to convert to revenue within the following 12 months.
Management said it has no clear timeline for when memory supply and demand will balance but expects conditions to remain supportive through 2028. Fiscal 2026 capital spending was about $30.7 billion, with additional clean-room capacity expected in late 2028 and beyond.
Micron is co-designing a custom HBM4E product with NVIDIA, reflecting demand for specialized memory. While AI memory demand has driven strength in data-center bit growth, mobile and client bit shipments declined sequentially for a second consecutive quarter.
Investors and analysts differ in their interpretation. Some see tight supply, large upfront commitments, and elevated guidance as reasons to revise revenue and margin expectations upward. Others highlight execution risks and the timing of new capacity as key factors for sustaining profitability gains.
