Micron's Record Performance
Micron Posts Record Q3 Revenue, Surpassing Forecasts as HBM4E Mass Production Set for Next Year
Anonymous
Key Points
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Micron posted Q3 revenue of $41.46 billion, topping London Stock Exchange Group’s forecast of $35.84 billion and marking a quarterly revenue record for the company.
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The Cloud Memory Unit generated about $13.77 billion in revenue, with its sixth-generation HBM4 already installed in customers’ products and the seventh-generation HBM4E expected to enter mass production next year.
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Micron’s third-quarter non-GAAP earnings were $25.11 per share, with a reported net income of around $28.2 billion, underscoring the strength of the memory upcycle.
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The stock jumped more than 15% in after-hours trading following the earnings release, signaling strong investor enthusiasm despite prior pre-market weakness.
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Insider selling totaled about $92.5 million over the past three months, and the company carried a market capitalization around $1.18 trillion with a reported P/E ratio near 49.2x.
Micron Technology shattered its own revenue record in fiscal Q3 2026, posting $41.46 billion in sales — a 4.5-fold jump from $9.3 billion a year earlier — and blowing past analyst estimates of $35.84 billion, according to Seoul Economic Daily. The memory chipmaker's stock surged 14.5% in after-hours trading to $1,199.52, pushing its market cap above $1.18 trillion.
The company also issued a stunning Q4 outlook of $50 billion in revenue — well above Wall Street's $43 billion estimate — and guided for adjusted earnings of $30 to $32 per share, compared to analyst forecasts of just $24.30, per Watchlist News.
AI Data Centers Drive a Once-Unthinkable Revenue Leap
Micron's Cloud Memory Unit generated $13.77 billion in Q3 alone. CFO Mark Murphy said data center revenue is now running at an "annualized run rate of over $100 billion." Operating margins hit 81.2%, up from just 26.8% a year ago. Non-GAAP earnings came in at $25.11 per share, more than double the $20.28 estimate, according to Seoul Economic Daily.
CEO Sanjay Mehrotra called the results a "transformational" shift. He said Micron is currently filling only "half to two-thirds of customer demand" for its high-bandwidth memory chips, known as HBM. That means demand is still running far ahead of supply. Micron closed Q3 with $30.2 billion in cash and generated $18.3 billion in adjusted free cash flow.
HBM4 Is Already Shipping — HBM4E Mass Production Comes Next Year
Micron's sixth-generation HBM4 chips are already installed in customers' products. The company is now developing HBM4E, which is built on its most advanced "1-gamma" DRAM technology. EVP Manish Bhatia said, "Development of HBM4E is well underway... we expect to begin mass production next year," per Seoul Economic Daily.
For HBM4E, Micron is partnering with TSMC to manufacture the base logic die. This breaks from Micron's tradition of making everything in-house. The move allows Micron to offer "semi-configurable" custom memory to lead AI clients like Nvidia and Google. Micron plans to spend $27 billion in capital expenditures in FY2027 to keep up with demand that is already "fully booked through 2027."
Long-Term Contracts Lock In $22 Billion From Customers
To smooth out the memory market's brutal boom-and-bust cycles, Micron signed 16 Strategic Customer Agreements (SCAs). These are "take-or-pay" deals — customers must pay even if they don't take delivery. So far, customers have handed Micron $22 billion in cash deposits to secure supply. The SCAs now cover about 20% of Micron's total DRAM volume, according to briefing research.
Mehrotra said these agreements "will significantly enhance the durability and predictability of Micron's performance." Old-school traders remain skeptical, noting that "supply and demand imbalances rarely last" and the memory market has a history of brutal downturns, per Watchlist News. Still, analysts who had forecasted only $35.25 billion were caught badly off-guard by the 18% upside surprise.
Insider Selling and a 49x P/E Ratio Temper the Euphoria
Not everyone is celebrating. Micron insiders sold $92.5 million in stock over the past three months, a signal some analysts read as a sign management thinks the stock is near a peak. The company trades at a price-to-earnings ratio of 49.2x — well above its historical median — leading some analysts to warn the stock may be "overvalued" and pricing in perfection through 2027, per Crypto Briefing.
Despite that, Wall Street bulls like Kevin Cassidy of Rosenblatt Securities argue the "beat-and-raise" cycle is just beginning, since AI demand still outstrips supply. Micron also declared a $0.15 quarterly dividend, payable July 21, 2026. Asian and European semiconductor stocks rallied the morning after the report on the strength of Micron's $50 billion Q4 guidance.
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