Micron Technology is heading into its fiscal 2026 fourth-quarter report with guidance pointing to another sharp increase in revenue and earnings, extending a memory-market surge driven by AI servers, high-bandwidth memory and rising prices for DRAM and NAND products. The company expects quarterly revenue of $50 billion, plus or minus $1 billion, and non-GAAP earnings of about $31 a share, following a third quarter in which revenue reached $41.456 billion.
The results, due after the U.S. market closes on Sept. 30, will test whether Micron can meet expectations that have moved beyond its own forecast. A consensus compiled by AlphaStreet from 33 analysts projected revenue of $51.2 billion and earnings per share of $31.56. Earnings estimates ranged widely, from $28.04 to $37.44 per share, reflecting uncertainty over how quickly memory pricing can continue rising and how much supply Micron can deliver.
Micron’s fourth-quarter outlook assumes a non-GAAP gross margin of roughly 86%, operating expenses of about $1.65 billion and 1.15 billion diluted shares. At the midpoint, the guidance would represent another substantial increase from the $25.11 in non-GAAP earnings per share reported in the fiscal third quarter.
Third-quarter results were driven by pricing rather than volume
Micron’s third-quarter revenue rose 74% from the preceding quarter and 346% from a year earlier. Its non-GAAP gross margin reached 84.9%, while non-GAAP operating margin was 81.2%. Adjusted free cash flow totaled $18.3 billion, supported by $25.39 billion in operating cash flow and $7.1 billion in net capital expenditures.
GAAP net income was $28.243 billion, or $24.67 per diluted share. Micron’s 10-Q showed cost of sales equaled 15% of quarterly revenue, down sharply from 62% a year earlier. That movement captures the scale of the industry’s pricing reversal: memory makers are selling products at substantially higher prices while manufacturing costs have not risen at the same pace.
DRAM accounted for $31.3 billion, or 76%, of third-quarter revenue. Bit shipments increased only by a low single-digit percentage from the prior quarter, while pricing rose by more than 60%, according to Micron. NAND revenue reached $9.9 billion, with bit shipments up a mid-single-digit percentage and prices rising about 85% quarter over quarter.
The figures place pricing, rather than an extraordinary jump in unit volumes, at the center of Micron’s earnings expansion. TrendForce forecast in its third-quarter 2026 survey that conventional DRAM contract prices would rise 13% to 18% quarter over quarter, while NAND contract prices would increase 10% to 15%. The research firm said PC and smartphone customers were approaching price-tolerance limits, while comparisons with earlier price increases were becoming more demanding.
AI memory demand is consuming manufacturing capacity
Micron has tied much of the current supply pressure to high-bandwidth memory, or HBM, which is used alongside AI accelerators in data-center systems. CFO Mark Murphy said, in comments cited by MarketBeat from Micron statements, that HBM3-era production uses about three times as much wafer capacity as conventional DRAM. The trade ratio rises with later HBM generations.
That production trade-off gives AI memory products a disproportionate effect on the rest of the DRAM market. A manufacturer allocating more wafers to HBM has fewer available for standard server, PC, mobile and consumer-memory products, even if overall wafer output remains steady.
Micron reported $13.769 billion in cloud-memory revenue in the fiscal third quarter, at an 83% gross margin. Core data-center revenue was $11.524 billion, with an 87% gross margin. Mobile and client revenue produced $11.521 billion at an 87% gross margin, while automotive and embedded revenue was $4.634 billion with a 79% gross margin.
Demand from AI-system builders has remained strong. Nvidia reported $96.2 billion in revenue for the quarter ended July 26, including $89 billion from its data-center segment, up 117% from a year earlier. Nvidia guided for $108 billion in revenue, plus or minus 2%, in its following quarter. That spending cycle has created a powerful market for HBM suppliers, though Micron faces established competition from SK hynix and Samsung.
SK hynix cited IDC data in a filing submitted to the U.S. Securities and Exchange Commission showing it held a 56.4% revenue share of the HBM market in the first quarter of calendar 2026. The same filing put SK hynix’s overall DRAM revenue share, including HBM, at 29.1%.
Contracts and deposits could reduce revenue volatility
Micron has disclosed 16 strategic customer agreements covering about 20% of its DRAM output and roughly one-third of its NAND output. Fourteen agreements represent about $100 billion in minimum-price contracted revenue, according to the company, alongside approximately $22 billion in customer deposits and related financial commitments. About $18 billion of that amount consists of cash deposits.
The arrangements largely span calendar 2026 through 2030, with most structured as five-year agreements. Automotive contracts generally run for three years. Micron said fixed-price contracts or agreements with price caps near current levels are expected to account for about 40% of revenue once all planned deals are complete.
Those agreements give Micron more visibility as it commits heavily to new fabrication and packaging capacity. They may also limit how much of the company’s future revenue remains exposed to spot-market price movements, particularly if memory pricing eventually cools.
Micron ended the third quarter with $30.2 billion in cash and investments and $5.7 billion in debt, leaving net cash of $24.4 billion. Inventory was $8.6 billion, equivalent to 120 days, while DRAM inventory days were below the company-wide level. Micron also began reporting remaining performance obligations in the May quarter and finished with more than $5 billion under that measure.
Capacity additions are aimed at 2027 and beyond
Micron guided for about $10 billion in capital spending during the fiscal fourth quarter and approximately $27 billion for fiscal 2026, net of expected government incentives. It expects fiscal 2027 quarterly capital spending to exceed the fourth-quarter level, with more than half of the year-over-year increase tied to construction intended to bring forward cleanroom capacity.
The company’s Idaho ID1 fab is targeting first wafers in mid-2027, while ID2 is planned for late 2028. Micron said its first New York fab began construction in January 2026.
In Taiwan, an acquired Taichung site with an existing 300,000-square-foot facility is expected to reach meaningful product shipments in mid-2027, roughly one quarter sooner than previously expected. Micron has also begun building a second cleanroom of similar size there, designed to support extreme ultraviolet lithography equipment.
Micron expects its Singapore site to begin making a meaningful contribution to HBM packaging capacity in the first half of 2027. It has also started initial volume wafer production of 1-alpha DDR4 at its Manassas, Virginia facility for automotive, industrial, medical, aerospace and defense uses.
The company projected calendar 2026 DRAM bit-demand growth in the low-20% to mid-20% range and NAND growth of about 20%. Micron expects its DRAM supply growth to track the industry, while its NAND supply growth should come in slightly below it. The Sept. 30 report will show whether its near-term output, pricing and customer commitments can sustain earnings at the level its guidance now implies.
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