TLDR
- Micron reported record revenue of $23.86 billion, up 196.3% year-over-year, beating estimates of $18.90 billion
- EPS came in at $12.20 vs. the $8.50 expected — a $3.70 beat
- Stock fell ~4.8% as investors worried about planned capex of $25 billion+
- Micron secured a five-year strategic agreement with Nvidia for its next-gen “Vera Rubin” AI platform
- HBM (high-bandwidth memory) backlog is sold out through end of 2026; HBM4 volume shipments have begun
Micron delivered one of the strongest quarters in its history on March 18, then watched its stock fall nearly 5%. That’s Wall Street for you.
The numbers were hard to argue with. Revenue hit $23.86 billion for the quarter — up 196.3% year-over-year and well ahead of the $18.90 billion analysts had penciled in. EPS of $12.20 smashed the $8.50 consensus by $3.70. Return on equity came in at 41.16%, with a net margin of 41.49%.
So why did the stock drop? The short answer: capex.
Management signaled plans for “meaningfully higher” capital spending — north of $25 billion — to expand capacity for the next AI cycle. For a company that has historically been vulnerable to boom-and-bust cycles in commodity memory, that number gave investors pause.
The Nvidia Deal and HBM4 Momentum
The headline buried inside the earnings report may matter more than the capex line. Micron confirmed a five-year strategic agreement with Nvidia to supply memory for the “Vera Rubin” AI platform — Nvidia’s next-generation hardware. That’s not a short-term supply contract. It’s a multi-year commitment that changes how investors should think about Micron’s revenue visibility.
On top of that, Micron announced it has begun volume shipments of HBM4, the specialized high-bandwidth memory chip at the center of the Rubin platform. Management confirmed the HBM backlog is effectively sold out through the end of 2026.
The supply constraint is the point. HBM4 is technically complex to manufacture, which means even a large capex program won’t immediately flood the market. Analysts at Mizuho raised their price target from $480 to $530 post-earnings, citing persistent HBM shortages as a support for pricing and margins.
Valuation and Wall Street Reaction
Analysts are forecasting EPS of roughly $58 for fiscal 2026, implying a forward P/E of around 7.7x. For fiscal 2027, with the HBM backlog largely spoken for, consensus EPS estimates sit near $95.50 — putting the forward multiple at roughly 4.7x.
The Wall Street consensus remains firmly bullish. Based on MarketBeat data, MU carries a “Buy” rating from 29 analysts, a “Strong Buy” from five, and a “Hold” from four. The consensus price target sits at $453.55, though individual targets vary widely — Rosenblatt has a $500 target, Mizuho is at $530, and Goldman Sachs issued a “Neutral” with a $400 target.
On the insider side, EVP Sumit Sadana sold 25,000 shares on February 2 at an average price of $429.89, totaling $10.75 million. CAO Scott R. Allen sold 2,000 shares at $337.50 in January. Over the last 90 days, insiders sold 53,623 shares worth $21.8 million, while buying 23,200 shares worth $7.8 million.
Institutional ownership stands at 80.84%. Procyon Advisors increased its stake by 392.7% in Q4, adding 5,101 shares to bring its total to 6,400 shares valued at approximately $1.83 million.
MU stock opened at $422.81 on Monday. Its 52-week range runs from $61.54 to a high of $471.34. The company also raised its quarterly dividend from $0.12 to $0.15, payable April 15 to holders of record as of March 30.
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