In its recent earnings report, Micron Technology forecasted that first-quarter fiscal year 2026 revenue would reach approximately $12.5 billion, significantly exceeding the average analyst expectation of $11.9 billion. Adjusted earnings per share are expected to be about $3.75, also surpassing the market forecast of $3.05. This robust outlook confirms that Micron has become a major beneficiary of capital expenditure in the AI field. Its high-bandwidth memory (HBM), crucial for developing the chips and systems required for AI models, has become a highly profitable core product for the company.
After the market closed on September 23rd, Eastern Time, Micron Technology’s fourth-quarter report revealed a 46% year-over-year increase in sales to $11.3 billion, slightly exceeding analyst expectations. Adjusted earnings per share were $3.03, also beating the average market forecast. However, after a strong performance that saw its stock price nearly double within the year, Micron faces even higher market expectations. Following the earnings release, its stock price experienced significant volatility in after-hours trading, reflecting that investors remain cautious amidst the optimism. CEO Sanjay Mehrotra stated that the company’s data center business hit a record high in fiscal year 2025, entering the new fiscal year with strong momentum. He emphasized that, as the only US-based memory manufacturer, Micron holds a unique advantage in capitalizing on AI opportunities.
Micron indicated that the tight supply of memory chips is expected to continue into next year. Strong demand for data center equipment has made it difficult for companies to fulfill orders, while the AI business is also driving demand for Micron’s second-largest product line, NAND flash memory. In response to market growth, the company’s capital expenditure will continue to increase. In fiscal year 2025, Micron invested $13.8 billion in new factories and equipment and anticipates that investment in the current fiscal year will exceed this amount. Furthermore, the company has already reached pricing agreements for most of its HBM3e memory chips for 2026 and has begun sampling the next-generation HBM4 chips. Selling these products under fixed contracts will help ensure future revenue stability.
In a post-earnings interview, Manish Bhatia, Micron’s Executive Vice President of Global Operations, emphasized that the company’s strategic focus is on improving profitability, prioritizing it over market share growth. He also noted that demand for memory chips from the PC and smartphone industries is recovering. While these sectors had lagged behind data centers in adopting AI technology, they are now catching up rapidly. Bhatia also explained the unique characteristics of the HBM market: its more complex manufacturing process and longer production line times inherently limit the rapid expansion of overall supply. This helps maintain healthy market development and mitigates the inherent cyclical volatility of the memory chip industry.
In the intense market competition, Micron and its South Korean competitor SK Hynix have made progress in their rivalry with industry leader Samsung Electronics. Both gained an advantage by launching the latest HBM products that work closely with Nvidia’s AI processors more quickly. Micron executives stated that the company’s latest and upcoming next-generation products are helping it secure a leading market position. Analysts are also optimistic about Micron’s growth potential in the data center market. Previously, Christopher Danely, an analyst at Citigroup, raised Micron’s target stock price to $175 and accurately predicted that its performance guidance would “far exceed market expectations.” He pointed out that Micron is benefiting from a market environment where demand significantly outstrips supply, particularly in the data center sector, which contributes over half of its revenue.
