TLDR
- Micron surged 17.1% after reporting fiscal Q3 2026 revenue of $41.46 billion, up 346% year-over-year, with EPS of $25.11 beating the $20.5 estimate
- Q4 guidance came in at ~$50 billion revenue and ~$31 EPS, both well above Wall Street expectations
- The company locked in ~$100 billion in multi-year, take-or-pay strategic customer agreements (SCAs) with 16 customers
- CEO stated there is “no line of sight” to supply catching up with demand before 2028
- Barclays raised its MU price target 70% from $1,175 to $2,000 and reiterated a Buy rating
Micron Technology delivered its best quarter on record Wednesday, and Wall Street took notice fast.
The memory chipmaker reported fiscal Q3 2026 revenue of $41.46 billion, up 346% year-over-year and roughly 17% above what analysts had expected. Non-GAAP EPS came in at $25.11, topping the $20.50 consensus estimate. Gross margin hit 84.9%, compared to just 39% a year earlier.
MU stock jumped 17.1% on the news, trading at $1,209 per share — a new 52-week high.
The earnings beat was strong on its own. But what really moved the stock was what comes next.
Micron guided fiscal Q4 revenue to approximately $50 billion and EPS of around $31. Both figures cleared estimates by a wide margin. Wall Street had been expecting Q4 revenue of roughly $43 billion and EPS of about $25.31.
$100 Billion in Locked-In Contracts
The company also announced it has signed 16 Strategic Customer Agreements (SCAs) — take-or-pay deals across data centers, consumer, and auto markets. Fourteen of those agreements carry a cumulative minimum revenue commitment of $100 billion over their terms.
These aren’t handshake deals. Customers have put down $22 billion in deposits. Normal SCAs run five years (2026–2030), while automotive contracts are three-year terms.
Barclays analyst Thomas O’Malley called the SCA details better than anticipated, both in terms of revenue size and number of customers. He raised his MU price target 70% from $1,175 to $2,000, citing a 12x multiple on his revised 2027 EPS estimate of $166.74.
O’Malley noted the current SCAs cover about 20% of total DRAM volume and 33% of NAND volume. Once all agreements are finalized, Micron expects more than 50% of its revenue to come from these deals.
Data-center revenue topped $25 billion in the quarter — a $100 billion-plus annualized run rate.
No Supply Relief Until 2028
Micron CEO Sanjay Mehrotra said there is “no line of sight” to supply catching up with demand before 2028. DRAM prices rose in the low-60s percent range in the quarter, driven by a structural shortage across the industry.
That shortage is showing up elsewhere too. Samsung reported a 146% jump in DRAM average selling prices in Q1. SK Hynix flagged mid-60s percent price gains.
The supply picture is tight across all three major memory makers.
It’s worth noting Micron’s stock had dropped 13.6% just two days earlier after reports that SK Hynix was slowing its high-bandwidth memory (HBM) expansion. That sell-off now looks like it was overdone.
HBM ramp costs and new fab builds will add roughly $1 billion to FY2027 operating expenses, and the $22 billion in customer deposits will eventually need to be repaid — both worth watching.
Wall Street currently has a Strong Buy consensus on MU, with 28 Buy ratings and just one Hold. The average price target of $1,526.67 implies about 36% upside from current levels.
Micron is up 283% since the start of the year.
🚨 Our JUNE Stock Picks Are Live!
A new month means new opportunities. Our analysts have just released their top stock picks for June, highlighting companies with strong momentum that rank highly on our KO Score algorithm. We’re also now sharing trade ideas for both long-term and short-term investors, giving you more ways to spot potential opportunities in the market.
Sign up to Knockout Stocks today and get 50% off to unlock the full list and see which stocks made the cut.
Use coupon code Special50 for 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
