TLDR
- Micron crushed Q4 earnings with revenue up 379% to $54.2 billion, beating estimates of $51.5 billion.
- Adjusted net income jumped more than tenfold to $38.4 billion, with EPS hitting $33.42 versus $3.03 a year ago.
- MU stock rose 3% after the report and is up roughly 280% this year.
- Micron has locked in 26 strategic customer agreements covering over 35% of revenue through 2030.
- Management now expects tight memory supply through fiscal 2027 and 2028, pushing the bull case further out.
Micron (MU) stock climbed 3% after the chipmaker posted another blowout quarter. Shares are now up around 280% year to date.
The Q4 numbers topped expectations across the board. Revenue jumped 379% to $54.2 billion, ahead of the $51.5 billion analysts had penciled in.
Adjusted net income soared more than tenfold to $38.4 billion. Earnings per share climbed from $3.03 a year ago to $33.42, topping the $31.82 estimate.
Wall Street’s reaction was muted despite the beat. The stock has already priced in a lot of good news after more than doubling over the past year.
What’s Driving the Margins
Heading into earnings, analysts had one big question for Micron: can gross margins hold at current levels? Creative Strategies CEO Ben Bajarin put it bluntly, asking whether prices needed to normalize so it didn’t look like price gouging.
CFO Mark Murphy addressed this directly on the earnings call. He said Q1 gross margins will set a new floor before climbing higher again.
The dip comes from higher fiscal 2026 compensation tied to manufacturing. Micron absorbed most of that cost in Q4, so Q1 will feel the pinch instead.
Murphy told analysts margins should improve after that, driven by more moderate price increases rather than steep hikes.
Demand isn’t the issue here. Data center builders are buying memory chips faster than Micron, Samsung, and SK Hynix can produce them.
Supply Deals Lock In Future Revenue
Micron’s strategic customer agreements are a key part of the story. These five-year deals lock in pricing and protect against the boom-and-bust cycles that typically hit the memory business.
CEO Sanjay Mehrotra said the company has signed 26 of these agreements so far. Together, they’re expected to account for more than 35% of revenue through 2030.
That’s a meaningful cushion if the AI-driven demand surge eventually cools off. Memory has historically been cyclical, with new supply coming online every few years to ease shortages.
Micron also updated its supply-demand outlook in this report. The company now expects conditions to stay tight through fiscal 2027 and 2028, not just through 2027 as previously stated.
That’s a shift from last quarter’s guidance, which only called out calendar 2027. Management said industry demand has strengthened since the last earnings call.
Based on trailing four-quarter earnings, Micron trades at 15 times earnings. Forward estimates call for $171.90 in EPS next year and $189.62 the year after, putting the forward P/E below 7.
The company is also investing heavily in future capacity. A new $100 billion facility is planned for upstate New York, alongside two advanced manufacturing sites at its Idaho headquarters.
Those investments are expected to triple Micron’s production capacity over the next decade. Much of that new capacity will shift toward high bandwidth memory, which commands higher prices than standard DRAM chips.
Restrictions tied to the CHIPS Act are set to expire on December 9. That could open the door for Micron to pursue larger share buybacks given its current valuation.
Stop guessing and start investing with confidence. KnockoutStocks gives you the AI insights, market intelligence, and stock research you need to spot opportunities, cut through the noise, and make smarter investment decisions — all in one powerful platform.
Sign up today and get 50% OFF full access to our premium stock picks.
Simply use coupon code SPECIAL50 at checkout to claim your exclusive discount.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
