Micron Earnings: Record Q4 Beat Reignites Memory Cycle Debate

A Quarter That Rewrote the Scale

Micron's fiscal fourth-quarter results were large enough to change what a good quarter means for the company. Revenue reached $54.23 billion against a consensus of $51.07 billion, and adjusted earnings per share came in at $33.42 versus the $31.61 analysts had modeled. 1 A year earlier, Micron reported revenue of $11.32 billion and non-GAAP EPS of $3.03. 5

The year-over-year growth is described differently depending on where you look. One account says revenue "almost quadrupled." 1 Another puts it at nearly five times the prior-year figure. 5 The arithmetic supports the second reading, at roughly 4.8x. Sequential growth was also strong: revenue rose 31% from $41.46 billion in the third quarter. 5 GAAP net income was $37.70 billion, up from $3.20 billion a year ago. 5

The engine was DRAM. Revenue from that segment rose 343% to $39.8 billion, or 73% of total sales. Data center revenue grew elevenfold. 1 Micron also guided to another substantial step up in fiscal Q1 2027, which signals that management does not see the curve flattening yet. 5 One report says the company expects to keep roughly 81 cents of every sales dollar as margin in the current quarter. For a memory maker, that is an extraordinary figure. 4

Why HBM Changed the Story

The structural argument rests on high-bandwidth memory, the stacked DRAM that feeds AI accelerators. Micron is the only U.S.-based producer of it. 1 Its 2026 HBM output is reported to be fully sold under binding contracts. 24 One account says demand is sold out through 2027. 3 Supporters argue those contracts give Micron multi-quarter earnings visibility. Memory makers have historically lacked that kind of visibility because they were exposed to spot-price swings. 2 Tight supply has also pushed memory prices to record levels as DRAM inventories shrink. Micron's relationship with Nvidia is cited as a key tailwind. 3

The market has priced much of this in. Micron's value crossed $1 trillion on May 26 after doubling in just 48 days, the fastest such climb on record. 3 The stock is up more than 700%. 24 After an 11% one-day jump to a record near $1,089, its market value stood at roughly $1.2 trillion. 4

The Valuation Fight

This is where the coverage splits. Bullish targets range from $1,087 to $1,500 in one survey of Wall Street estimates. 2 Others report top targets of $1,625 and $1,750. 4 UBS tripled its price target, arguing Micron remains cheap relative to peers given its long-term contract opportunities. 3

The bear case is just as specific. At least one analyst rates the stock a sell with a target near $477, well below current levels. 4 The reasoning is the oldest pattern in memory: once supply catches up with demand, prices fall and profits fall faster. 4 Even the more upbeat assessments acknowledge that eventual oversupply is the main risk, and they place the strongest stretch of the bull case in 2027–2028. 3

The figures for business mix also vary. One analysis puts data center revenue at just over 56% of sales. 2 That number appears to reflect an earlier snapshot, and the latest quarter's elevenfold data center surge implies a heavier tilt now. 1 The gap illustrates how fast the baseline is moving, and how quickly any valuation model can go stale.

Reading the Cycle

The operating results are hard to dispute. Micron beat on revenue and earnings, guided higher, and is selling its most strategic product under contract. The open question is whether contracts make memory a different kind of business or simply delay the familiar downturn.

The contracts are real, but they cover a defined window, mostly 2026 and possibly 2027. Margins near 80% will draw capacity from every competitor able to build it. The most likely outcome is that Micron stays very profitable through the contract period while the stock grows more sensitive to any sign of capacity additions or easing HBM prices. At a $1 trillion-plus valuation, investors are effectively betting the supercycle lasts well beyond what the contracts guarantee.

The bulls may be right about earnings and still be overpaying for them. For now, the evidence favors Micron's fundamentals. Whether the stock is a sound investment from here depends on timing, and the history of memory chips suggests that timing is where most investors get it wrong.