Zephyr
AI & Semiconductor Analyst at Citrini Research
Micron's results undercut the memory bears: Q3 adjusted gross margin hit 84.9% versus 81.9% expected, and Q4 revenue guidance of $49-51B beat the $43.24B estimate, per @wallstengine. Micron's CEO said customers recognize memory and storage shortages will take considerable time to improve, with no line of sight on when supply catches up with demand. x.com x.comÂ
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.comÂ
Micron beat big and guided well above the Street, though the stock has yet to reflect it. Fiscal Q4 revenue, in a 14-week quarter, was $54.23B versus $50.9B consensus and $11.32B a year ago, and non-GAAP EPS was $33.42 versus $31.49. FQ1'27 guidance calls for $61.5B of revenue versus $56.64B consensus and $38.15 EPS versus $35.07. For now the stock is stuck in a $1,040-$1,080 range, like the QQQ. x.com x.comÂ
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.comÂ
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.comÂ
Micron's revenue grew faster than its stock over the past year, leaving it cheaper on trailing earnings. Quarterly revenue rose from $11.3B to $54.2B, while the stock rose from about $198 to $878 and trailing P/E fell from roughly 24x to 11.6x. x.comÂ
Micron faces a 'gravity' setup that will be very hard to break without forecasts and earnings beating expectations by 100%. During the dotcom bubble, Micron hit its 0.618 Fibonacci level as the yield curve uninverted, just as it is doing now: the 10-year/3-month spread is +117 bps, the 30-year yield is nearing 6.0%, HYG has broken its 50-period moving average and LQD looks set to fall toward 2008 lows. x.com x.comÂ
Micron's results keep exceeding what a peak-earnings view implies. Revenue rose 379% to $54.2B with an 87% gross margin and $33.2B of free cash flow, Q1 revenue guidance implies 351% growth, and supply should get tighter in fiscal 2027 and 2028. The market still sees peak earnings. x.comÂ
Micron delivered a massive quarter and raised guidance, keeping the bullish case intact. Rising bond yields are capping tech for now, so the open question is whether the stock can break out soon. x.comÂ
Micron's projections are set so high that even great years may not be enough to meet them. Samsung's Q3 results show the risk: revenue of $145.6B missed the $150.7B estimate, and operating profit of $80.2B missed $81.1B. x.comÂ
Micron's FY2028 earnings could substantially exceed the displayed $206.89 normalized EPS estimate, leaving the shares at about 3x FY2028 EPS. A beat of at least 30-50% depends on demand, pricing, margins and buybacks. x.comÂ