CK Capital
Defense/Space/Tech/Photonics Investor, Co-Owner of CV Research
Micron's Q4 FY26 confirms the memory supercycle. Revenue reached $54.23B, up 379% YoY, beating its own guidance by 6% and consensus by $3B, and Q1 FY27 guidance of $61.5B adds another 13%. Core data center revenue rose 56% QoQ to $18.0B at a 90% gross margin, with every segment above 83%. Customers prepaid $12.7B to lock in supply. Micron generated $62B of FY26 free cash flow after $27.4B of capex and holds $73.5B of cash against $5.2B of debt. x.com
Micron should beat its guidance this quarter, a very bullish setup, though the result is still to be seen. The forecast is $52.5 billion revenue against a $50 billion guide, 87% gross margin against about 86%, and $32.60 EPS against $31. Memory is sold out through 2026 under fixed-price contracts, long-term agreements lock in a fifth of DRAM and a third of NAND volume, and spot DRAM is up 52% since January. The Q1 guide is the key number: if pricing holds into 2027, every memory name follows. x.com
Micron's surging memory revenue points to a supercycle. Its segment and NAND revenue charts show a sharp recent acceleration, while the stock tests its rising 30-week average. x.com
Sandisk's fast-growing data-center revenue strengthens its case among memory names with upside. Data-center revenue rose 61% quarter over quarter; revenue of $11.03B, adjusted EPS of $49.51 and adjusted gross margin of 85.1% all exceeded estimates. For upside among Micron, Sandisk and Kioxia, Micron ranks first, then Sandisk, then Kioxia, until further guidance. x.com x.com
Micron's own guidance suggests the memory recovery comes later than consensus thinks. Its CFO guided to rising margins through fiscal 2027 alongside a more moderate pace of price increases, and Micron said it has no line of sight to when supply and demand will return to balance. x.com x.com
Micron's pricing strength should last, with management saying memory and storage supply and demand will be much tighter through 2028 and guiding 2027 stronger than 2026. Revenue rose 379% year over year and EPS 1,002%, with cloud, core data center, mobile/client and auto all up triple digits or more. Customer agreements rose to 26 from 16 quarter over quarter. x.com
Micron's AI memory-chip sales and accelerating growth support its upside case. Its 3.3/5 WATCH rating reflects a business with 60% of sales from cloud and data-center chips, 64 cents of profit per sales dollar and 256% sales growth last year. At the Oct. 15 close of $878.84, it traded about 42% below estimated fair value of $1,512.34. The case needs strong sales growth and expanding margins and cash flow; slower growth or a price outrunning the business are warning signs. x.com
Micron's roughly $1.37 trillion valuation already prices a durable rise in through-cycle earnings that memory's history has never shown. A reverse DCF at 9% WACC and 2% growth implies about $95 billion of steady cash flow, versus a record $9.2 billion and a ten-year average near $1.9 billion. At a 30% FCFF margin that needs about $317 billion of revenue, over 8x fiscal 2025 sales. The HBM bull case is real, but fiscal 2023's swing to a -37% operating margin shows how fast pricing reverses. x.com
Demand for Micron's products is through the roof, making its revenue surge only the beginning as it heads into 2027. The attached eight-quarter chart puts Q4 FY26 revenue at $54.2 billion, and Micron's gross margin is cited at 86%. A $100 billion revenue quarter could arrive in the not-so-distant future; the stock is a good bet here. x.com
Micron's results confirm the bullish case, and management will raise capex in 2027 because it cannot keep up with demand. Revenue was $54.229B versus $51.069B expected, and adjusted EPS $33.42 versus $31.60. Q1 guidance calls for $61.5B of revenue versus a $57.024B estimate and adjusted EPS of $38.15. x.com
Micron trades at about 57x normalized earnings because today's 74% gross margin will not last. At a normalized 30% margin, last quarter's $12.07 EPS would be about $4.16, or $17 annualized, versus a $971 price; fair value is about 15x normalized earnings plus net cash. Huge new memory capacity arrives in one to two years while current data center capex is unsustainable, so in two to three years much more memory will meet much less demand. Customers will then walk away from long-term deals. x.com … Show more
Micron's fiscal Q4 beat shows AI memory demand broadening beyond HBM into server DRAM and storage. Revenue reached $54.23B, up 30.8% quarter over quarter, adjusted EPS of $33.42 topped guidance, and gross margin hit 87%. Next-quarter guidance calls for $61.5B of revenue and $38.15 EPS, though a gross-margin guide 0.75 points lower at 86.25% tempers further profitability gains. Server SOCAMM revenue more than doubled, and Gen5 and Gen6 SSDs are shipping for KV-cache uses. x.com
