Micron Technology (MU) beat Wall Street’s expectations when it reported its earnings on Sept. 30. Analysts already expected big numbers, but MU surprised everyone by reporting the best quarter in its history.
Micron makes two kinds of memory chips found in nearly every modern electronic device: DRAM and NAND. DRAM is the short-term memory chip that helps the apps on a device run smoothly. NAND is the storage chip that keeps your photos, videos, and documents safe. Both are very important to the AI market, but there aren’t enough of them to go around.
That shortage is what makes things tricky. Because the same memory chips needed for AI servers also go inside your phone, laptop, and other electronics, when AI data centers buy up most of the supply, regular shoppers have to pay more to get electronics.
What’s worse is that the shortage is expected to continue until the end of 2028.
Micron’s record fourth quarter
For its fiscal fourth quarter, Micron reported revenue of $54.23 billion, which beat Wall Street’s estimate of $51.07 billion. The company’s adjusted earnings per share also came in at $33.42, which was above the $31.61 analysts expected, according to CNBC.
Also read: Micron just sent a stark memory chip warning to tech stock investors
The year-over-year increase was also very large. Micron’s revenue grew 379% from $11.32 billion, and adjusted earnings climbed more than 900% from $3.03 per share.
However, what really caught my attention, along with Wall Street’s, was Micron’s core Data Center business. That segment alone pulled in $18 billion for the quarter, an 11-fold increase from the approximately $1.58 billion it pulled in a year earlier.
Micron also expects a better performance in the first quarter of fiscal 2027. The company predicts it will make revenue of $61.5 billion and adjusted EPS of $38.15.
Both numbers are higher than Wall Street’s average estimates, and the company’s confidence has settled some investors’ worries that the AI chip cycle might be close to its peak.
Why your next phone or laptop could cost more
Micron is the only major maker of High Bandwidth Memory that is based in the United States. High Bandwidth Memory is the special type of memory used inside AI chips from Nvidia (NVDA) and AMD (AMD).
Because Micron is the only major U.S.-headquartered supplier, the country lacks a self-sustaining domestic supply chain, leaving American tech companies entirely dependent on a severely constrained global market.
Related: Micron Q4 2026 Earnings Call: Recap of $MU Earnings, Outlook
Data centers are willing to pay top dollar for HBM, so Micron is sending most of its supply their way. As a result, DRAM and NAND chip prices have risen by double-digit percentages in recent months. Since hardware producers like Apple (AAPL) and Samsung have to pay more for memory chips, some of that cost will show up in the prices of their products.
“The AI opportunity continues to expand our customer base and drive strong demand across our data center portfolio,” Micron CEO Sanjay Mehrotra said on the earnings call.
Micron’s adjusted gross margin reached 87% for the quarter, up from 45.7% a year earlier. That number alone shows just how much pricing power the company holds right now.
What the earnings mean for MU stock investors
Micron shares have risen more than 500% over the past year, and the company’s market cap now sits above $1.2 trillion. The stock recently closed at $1,065.11, which means MU is up about 238% year to date.
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Dan Ives of Wedbush Securities, who has covered the tech sector for more than two decades, called the quarter a “defining moment” for Micron. In his view, Micron is now a core AI infrastructure name, not just a cyclical memory maker.
However, even though Micron has guaranteed orders lined up from major cloud providers, its high stock price still makes it a risky bet.
Risks to consider before chasing the rally
To catch up with demand, Micron has decided to spend more than $250 billion to build new factories in the U.S. That is a huge bet that assumes AI demand will stay strong. If demand slows down before the new factories are ready, Micron could end up spending heavily for unused capacity.
Also, the memory business has always been highly unpredictable. This time it looks different because of the AI buildout, but no one can promise that it stays that way.
Analyst Vijay Rakesh of Mizuho has pointed out that Samsung and SK Hynix are rushing to supply more HBM, which could solve the shortage problem sooner than investors expect.
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