Gustavo Neffa
Partner & Director at Research for Traders, Economist & Professor
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'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
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'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
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
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 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 AI-driven cash generation looks outsized for its size amid market concern about debt risk. Its quarterly free cash flow has reached about $32.9B in under two years, above the peak quarters shown for Meta, Amazon, Google and Microsoft; only Nvidia and Apple have posted higher quarters, despite each being about five times Micron's size. x.comÂ
Micron's Q4 FY26 results beat across the board, per a quoted summary. Revenue rose 379% to $54.23B against a $51.07B estimate, adjusted EPS of $33.42 beat $31.61, and operating cash flow reached $43.97B. Q1 FY27 guidance of $61.5B in revenue and $38.15 in EPS tops estimates. x.comÂ
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.comÂ
Micron's sold-out high-bandwidth memory through 2027+ and contracts already being signed for 2029-2030+ extend its earnings runway. At 5x forward earnings, it is cheaper than a year ago; its private Anthropic stake is about to be instantly rerated at Anthropic's IPO, and a new share buyback is expected to be announced Dec. 9. Micron could certainly gain 30% in three months. x.com x.comÂ
