Micron Technology reported a standout fiscal‑2026 fourth‑quarter performance, delivering revenue of $54.23 billion—379 % higher year‑over‑year and ahead of the $51.07 billion consensus. Adjusted earnings per share soared 1,002 % to $33.42, eclipsing the $31.61 expectation. The strong results and forward‑looking outlook prompted the firm to lift its price target to $1,200 from $1,100 and maintain a buy‑equivalent rating.
The quarter’s success reflects the ongoing imbalance between memory supply and demand, particularly for DRAM, NAND and the specialized high‑bandwidth memory (HBM) that powers AI accelerators. Tight market conditions are expected to persist, with Micron forecasting even tighter supply dynamics in calendar 2027 and 2028. Roughly 75 % of the company’s 2027 output is already committed, and customer conversations are underway for 2028 allocations. CEO Sanjay Mehrotra noted that clean‑room expansions are essential to accelerate node‑transition supply growth, but a return to balanced supply‑and‑demand remains elusive.
To address the projected shortfall, Micron is accelerating capital expenditures to build new fabs and increase production capacity. The company has also expanded its Strategic Customer Agreements (SCAs), now totaling 26—up from 16 a quarter earlier—with several extended to 2031. These longer‑term contracts aim to smooth the traditional boom‑bust cycle, provide greater revenue visibility, and secure cash deposits that support further investment.
Guidance for fiscal‑2027 begins with a first‑quarter revenue estimate of $61.5 billion ± $1.5 billion, well above the $57.02 billion consensus. Adjusted EPS for the quarter is projected at $38.15 ± $1, topping the $35.40 consensus. Gross margin is anticipated at roughly 86.25 %, slightly below the prior quarter’s 87 % but attributed to higher employee compensation rather than weakening pricing. Management expects this margin to serve as the year‑low point.
Free cash flow in the recent quarter reached $33 billion, with an additional $128 billion projected for the upcoming fiscal year, positioning Micron for a potentially sizable share‑repurchase program once CHIPS Act restrictions ease in December. The robust cash generation, combined with stronger‑than‑expected earnings and a tightened market outlook, underpins the upward revision of the price target and the continued buy rating.
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