Micron Stock Rebounds as Analysts Raise Targets After Q4 Beat

A record quarter, a nervous reaction, then a recovery

Micron Technology just reported one of the strongest quarters any chipmaker has ever posted, and its stock has spent the weeks since being pushed in two directions. Fiscal fourth-quarter revenue came to $54.23 billion. That compares with $41.46 billion in the previous quarter and $11.32 billion a year earlier.1 Investors reacted cautiously at first. Shares dipped in after-hours trading as traders compared the strong outlook with how much the company plans to spend.4 The mood changed as brokerages raised their targets, and one account describes shares climbing 7% to about $1,120 in a single morning on a wave of large target increases.15

The recovery did not last. In late October the stock lost about 6% in one session during an AI-related sell-off in chip stocks.18 It closed Friday near $881.65, roughly 30% below its June high.15 By Monday it was trading higher again, gaining about 2% before the open after a 17% decline over the previous month.13 The pattern is hard to miss. Analysts keep lifting their price targets, and the share price keeps failing to follow.

The numbers behind the beat

Every estimate set used in the coverage puts Micron above expectations. Adjusted earnings per share came in at $33.42. GAAP net income was $37.70 billion, or $32.87 per diluted share.1 Exactly what Micron beat depends on which consensus you use. CNBC compared the result with a $31.61 estimate and put the revenue expectation at $51.07 billion.3 Investing.com used $31.16 and $50.45 billion, which it calculated as a 7.25% earnings surprise and a 7.49% revenue surprise.4 MarketBeat's consensus was $31.77 per share on $51.33 billion in revenue.6 Whichever figure is used, the gap is wide. Revenue topped the high end of Micron's own guidance range by more than $3 billion.5

The profitability figures stand out most. Gross margin was 87%, up 210 basis points from the previous quarter. Operating income reached $44.6 billion, for an operating margin of 82.3%.2 For the full fiscal year, revenue rose 256% to $133.2 billion, gross margin was 81.1%, and adjusted EPS grew 811% to $75.52.2 One outlet pointed out that Micron earned more revenue in a single quarter than in all of fiscal 2025, when sales were $37.38 billion.10

This is also part of a longer run of beats. MarketBeat's history shows the second quarter at $12.20 per share against a $9.19 consensus and the third quarter at $25.11 against $21.39.6 One analysis describes the latest report as Micron's eighth beat in a row.15

Pricing, not volume, is the driver

The detail behind the headline figures shows that the growth comes mainly from price increases. DRAM revenue reached a record $39.8 billion, 73% of the total. Bit shipments rose by a mid-single-digit percentage from the prior quarter, while prices climbed in the high teens.2 NAND shows the same pattern more sharply. Revenue of $14.1 billion rose 42% from the previous quarter. Prices went up about 30%, but bit shipments grew only about 10%.2

By business unit, the core data center group brought in $18 billion, compared with $1.58 billion a year earlier. The cloud memory unit, which includes high-bandwidth memory, contributed $16.3 billion.10 Data center SSD revenue was close to $10 billion, more than ten times the figure a year earlier.4 CNBC highlighted that Micron is the only U.S.-based maker of high-bandwidth memory. Chief Executive Sanjay Mehrotra also said the company is working with Nvidia on what he called the industry's first custom HBM implementation.3

The growth figures need one adjustment. Fiscal 2026 had 53 weeks, so the fourth quarter ran 14 weeks rather than 13. One analysis estimates that sequential revenue growth per week was closer to 21.5% than the reported 31%.5 That still leaves extraordinary results. But the extra week did make the headline quarter-over-quarter figure look better than the underlying pace.

Guidance and contracts: the main reasons for higher targets

Analysts are raising targets mostly because of what Micron expects next. For fiscal Q1 2027, management guided to a record $61.5 billion in revenue, plus or minus $1.5 billion, with gross margin around 86.25% and EPS of $38.15, plus or minus $1.00.2 The revenue midpoint is above the Street's expectation, which various outlets put at about $57 billion.610 Management also expects revenue to grow every quarter of fiscal 2027.2

Visibility is the second argument. Chief Financial Officer Mark Murphy said Micron has signed 26 strategic customer agreements and has remaining performance obligations of about $150 billion. He added that even at the contractual floor prices, margins should be well above any earlier cycle peak.4 Management says more than 75% of fiscal 2027 shipments are already committed, and that it cannot yet see when supply and demand will come back into balance.15 One review of the 10-K describes the contract structure in more detail: $12.75 billion in customer deposits and roughly $33 billion of obligations over the next twelve months.5

These points appear again and again in analyst notes. DA Davidson, Rosenblatt, Mizuho and Baird raised targets, citing strong results, guidance above consensus and tight DRAM and NAND supply. JPMorgan, TD Cowen and Deutsche Bank pointed to demand that should last, tied to AI.20 Rosenblatt's Kevin Cassidy raised his target to $1,900, citing constrained supply and ten new strategic customer agreements.18 DA Davidson's Gil Luria kept a $3,000 target after the October sell-off and argued that AI could support memory demand for three to five years.18 Cantor Fitzgerald confirmed a $2,000 target, and William Blair set one at $1,300.19 Barclays also moved to $2,000.17

The consensus target depends on who is counting

The coverage disagrees on what "the Street" thinks Micron is worth. MarketBeat puts the average target at $1,407.88 across 46 analysts, with estimates running from $300 to $3,000.14 StockAnalysis puts it at $1,561.91 across 49 analysts and rates the consensus a Strong Buy.11 Benzinga data quoted elsewhere gives an average of $1,622.38.13 The difference of more than $200 probably comes from which estimates each aggregator includes and how quickly it drops old ones. Either way, every version implies a large premium to the current price of under $900.

Not everyone is that optimistic. 24/7 Wall St. sets a one-year base case of $995.75, about 13% above Friday's close and well below the consensus.15 Its argument is that the stock looks inexpensive on valuation multiples: about 12 times trailing non-GAAP earnings and around 6 times annualized first-quarter guidance.15 TheStreet gives similar figures, at about 13 times earnings and roughly 5 times forward earnings.18

Why the stock lags the estimates

The coverage points to several reasons the shares have not kept pace with earnings. Deutsche Bank has warned about margin "squishiness" as costs rise. Goldman Sachs and Wells Fargo have raised questions about future supply additions, gross-margin guidance and how capital spending is carried out.20 Operating expenses rose by $1.1 billion from the previous quarter to $2.6 billion.2 The guided gross margin of 86.25% is slightly below the 87% just reported, and one bullish analyst called it the only real weak spot in the guidance.8

The wider risks are about the industry cycle rather than Micron's execution. These include faster capacity growth at Micron, Samsung and SK Hynix, slower AI spending, and more efficient use of memory.18 A sell-off in chip stocks after Intel's earnings and weak PC outlook also hit Micron, along with warnings that rising memory prices have costs as well as benefits.15 Sentiment is still volatile enough that a single post from Elon Musk, predicting that humanoid robots will need more memory than everything else, lifted the shares by about 2.5%.18

Analysis: the market doubts how long the cycle will last

The overall picture is consistent. Micron's results are not in question. Revenue nearly quadrupled, margins are close to 87%, and guidance points to another record. What the market doubts is how long these conditions will last. One Seeking Alpha headline summed up the quarter as one where the earnings did the work but the multiple did not.9 A forward multiple in the mid-single digits is what investors usually assign to cyclical earnings they expect to peak.

The raised targets are therefore a bet that Micron's contracts make this cycle different: committed volumes, floor prices and customer deposits that reduce the eventual decline. The stock's fall from its June high shows that many investors are not yet convinced. The December quarterly report, which one outlet calls a make-or-break moment, will be the next test.15 The most useful thing to watch is not another beat but whether gross margins hold above 86% while prices keep rising. If they do, the gap between the consensus target and the share price will be hard to justify. If margins weaken, the doubts reflected in the share price will look justified.