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Micron Technology · MU · NASDAQ
Micron designs and manufactures DRAM and NAND memory chips out of Boise, Idaho, selling them to data-center hyperscalers, GPU vendors, phone and PC OEMs, and automakers — revenue is bits shipped times an industry-set price per gigabit.
$640
Price
$719B
Market cap
$37.4B
Revenue (FY25)
1978
Founded
Listed 1984; cycled within a $5–$100 band for three decades through five memory busts, then surged from $65 in April 2025 to $640 today on AI memory tightness.
2 · The tension
Memory just guided to a number 23 points above any prior cycle peak — new floor or overshoot?
- The setup. Q2 FY26 (Feb 2026) printed $23.9B revenue at 74% gross margin and $12.20 non-GAAP EPS; management's Q3 FY26 guide is $33.5B at ~81% GM and ~$19 EPS. Annualized run-rate near $134B vs FY2023 full-year revenue of $15.5B.
- The bull. At $640 the stock trades at 11× consensus FY26 EPS and 6.3× FY27. First five-year HBM Supply Capacity Agreement signed Q2 FY26; HBM 2026 sold out at negotiated pricing; portions of 2027 already priced.
- The bear. 81% gross margin sits 23 points above the FY18 super-cycle peak (58%); through-cycle EPS averaged $4.55 across the last eight years. SK hynix earned a 49% FY25 operating margin against Micron's 26% — nearly twice the profitability on the same demand.
The upcycle earnings are realized, not modeled. The next quarterly print tests whether 81% is a ceiling or a waystation.
3 · The largest revision tape in memory in a decade
Consensus FY27 EPS more than doubled in 90 days. Then the company guided above it.
$58
FY26 EPS
90 days ago: $33
$101
FY27 EPS
90 days ago: $43
26 / 0
30-day revisions
up / down for FY26
+695%
12-month return
at 95.5% of 52-wk range
Cost of revenue was nearly flat sequentially in Q2 FY26 (~$6.1B) while revenue grew 75% — the supply-shortage signature management now references publicly ('customers getting only 50% to two-thirds of their requirements'). The Q3 FY26 guide of $33.5B / ~81% GM / ~$19 EPS sits above the consensus that just doubled to catch it; June 24 settles whether the bar resets again.
4 · Where the cheap multiple isn't quite cheap
The 6.3× forward P/E rests on three tailwinds the Street hasn't stripped out.
- Tax windfall is ending. FY25 effective tax rate was 11.6% on a $1.05B Singapore incentive ($0.93 EPS). Micron's own 10-Q states Singapore Pillar Two takes effect from FY26 and 'largely offsets' the benefit. A clean 18–22% rate compresses non-GAAP EPS by ~$1.00–$1.50 per year before any cycle move.
- HBM4 Vera Rubin share is publicly disputed. Korea Economic Daily (March 2026) names Samsung and SK hynix as 'exclusive' HBM4 suppliers for NVIDIA's Vera Rubin platform; one independent analyst puts Micron at 0% on the socket. Micron's own press release describes parts 'designed for' Vera Rubin without naming share.
- Cash never reaches the shareholder. At the most lucrative pricing in 47 years, FY25 free cash flow was $1.7B on $8.5B net income — 20% conversion. FY26 capex raised intra-year above $25B; only $350M repurchased in Q2 FY26 against a $7.19B authorization, gated by CHIPS Act covenants.
On a clean denominator, '6.3× forward EPS' is closer to 9–11×. Still not expensive — but no longer a margin-of-safety story.
5 · June 24 settles five debates at once
The next print is unusually decisive — five separate variant signals resolve on the same day.
- Gross-margin trajectory. Sequential print at or above 80% with no language softening keeps the upcycle narrative intact. Below 70% — or a CFO reaffirmation that 'current margins are simply not sustainable' — forces a reset of the 75% upward revision tape.
- Effective tax rate + a second SCA. An ETR in the high teens validates the Pillar Two reset; another 11–12% print refutes it. A second multi-year Strategic Customer Agreement with a different counterparty is the bear's explicit cover signal — converts memory from spot commodity to contract industrial.
- HBM4 share + technical setup. Any prepared-remarks language naming Micron as dual or triple-source on Vera Rubin closes the most expensive bear leg. Stock sits at 95.5% of its 52-week range and 123% above the 200-day SMA; first technical support is the 50-day at $442, a 31% drop without any thesis change.
Q3 FY26 results expected on or about June 24, 2026. Preview window: J.P. Morgan TMT fireside on May 20.
6 · Bull & Bear
Lean long — but wait for confirmation that 81% is a floor, not a ceiling.
- For. Q2 FY26 actually printed $12.20 of non-GAAP EPS at 74% GM — earnings are realized, not modeled. At 6.3× consensus FY27, the burden of proof shifts to the bear to show the run-rate evaporates within two quarters.
- For. HBM has bent the entire memory profit pool. Micron's HBM share moved 9% to 21% in twelve months; first five-year Supply Capacity Agreement signed; HBM consumes ~3× the wafer area per bit of commodity DRAM, tightening DRAM across the whole industry.
- Against. SK hynix posted a 49% FY25 operating margin against Micron's 26%; Samsung's semiconductor (DS) division ran 66% in 1Q26 and just claimed industry-first HBM4 mass production for NVIDIA Vera Rubin. The closest pure-play peer earns nearly twice as much in the same cycle.
- Against. Combined Samsung + SK hynix + Micron 2026 capex tops $70B with FY27 construction guided +$10B YoY. Memory cycles end exactly when all three suppliers commit to growing supply. Insiders have logged 242 sells against zero open-market buys in the trailing 12 months; CEO moved 62% of his stake into estate-planning trusts in 2025.
- My view. The asymmetry of confirmed earnings at a single-digit forward multiple is real, but a single SCA is not yet a regime change. Conviction upgrades if Q3 GM holds above 70% and a second SCA from a different counterparty lands by Q4 FY26; flips to avoid on a sequential GM step-down or a Vera Rubin HBM4 majority going to Samsung.
Watchlist to re-rate: Q3 FY26 sequential gross margin and effective tax rate (June 24, 2026); a second multi-year HBM Supply Capacity Agreement with a different counterparty; explicit Vera Rubin HBM4 share disclosure from NVIDIA or Micron.