Micron Earnings - June 2026
Micron Technology, Inc.
$41.5B revenue, 84.6% gross margin, $50B Q4 guide.
A genuinely transformational print: revenue more than four times the prior year, $22 billion of Strategic Customer Agreement cash deposits, and an Anthropic partnership announced two days before the print.
Micron Technology (NASDAQ: MU) reported third-quarter fiscal 2026 results (quarter ended May 28, 2026) on June 24, 2026, posting record revenue of $41.46 billion, GAAP diluted EPS of $24.67, and non-GAAP diluted EPS of $25.11, all materially above consensus of approximately $34.66B in revenue and $19.95 in non-GAAP EPS. Revenue grew 74% sequentially from $23.86 billion in Q2 and approximately 4.5x year-over-year from $9.30 billion in Q3 FY25. GAAP gross margin reached 84.6% (non-GAAP 84.9%), up roughly 47 percentage points YoY, reflecting the historic memory pricing cycle driven by AI infrastructure demand outstripping supply.
Four items framed the print: (1) on June 22, 2026, two days before the print, Micron and Anthropic announced a multi-year strategic agreement covering memory and storage co-design, supply, enterprise Claude adoption and a Micron strategic investment in Anthropic's Series H funding round, positioning Anthropic as a major Strategic Customer; (2) management disclosed cumulative Strategic Customer Agreements that have generated $22 billion in cash deposits and related financial commitments, materially de-risking forward revenue visibility; (3) Q4 FY26 revenue guidance of $50.0 billion plus or minus $1.0 billion came in approximately $7 billion above consensus, with gross margin guided to approximately 86%; and (4) the Board declared a quarterly dividend of $0.15 per share and management committed to returning 100% of excess cash to shareholders going forward.
This is one of the cleanest large-cap prints we have seen this cycle. Micron is benefiting from the same AI infrastructure tailwind that drove NVIDIA's recent record print, but compounded by a memory industry structural-shortage dynamic that is far harder to dilute than logic compute. The Strategic Customer Agreements, $22 billion of cash deposits (including the marquee Anthropic strategic agreement announced June 22), and HBM4 high-volume shipments to the lead customer signal that the cycle peak is being pushed out, not pulled in. With a Strong Buy consensus, 12-month average price targets in the $1,015 to $1,297 range, and a Street-high of $1,500 (Bank of America), the asymmetry remains favorable, though the bar for further multiple expansion is now high given the substantial price appreciation already realized year-to-date.
Headline KPIs at a Glance
Third record quarter, +346% YoY.
Q3 FY26 revenue of $41.46 billion grew approximately 346% YoY and 74% sequentially, the company's third consecutive quarter of record revenue and a meaningful acceleration from the Q2 FY26 print of $23.86 billion. The print exceeded the high end of management's own Q3 outlook and beat consensus by roughly $6.8 billion. Foreign exchange impact was de minimis.
How the print obliterated consensus
GAAP net income of $28.24 billion (up roughly 1,400% YoY from $1.89 billion) translated to GAAP diluted EPS of $24.67. Non-GAAP net income of $28.86 billion translated to non-GAAP diluted EPS of $25.11. Operating cash flow of $25.39 billion and adjusted free cash flow of $18.3 billion were both quarterly records. Micron ended the quarter with $30.2 billion in cash, marketable investments, and restricted cash, providing substantial flexibility for continued capacity investment and capital returns.
Through the first nine months of fiscal 2026, Micron has generated $78.96 billion in revenue (versus $26.06 billion in the same period of fiscal 2025) and $47.27 billion in net income (versus $5.34 billion). The magnitude of the step-up reflects the convergence of the HBM ramp, broad-based DRAM and NAND pricing, and the strategic value of memory in AI infrastructure buildouts.
Cloud Memory leads, every BU 3x or better.
Cloud Memory Business Unit. Revenue of $13.77 billion (gross margin 83%, operating margin 78%) - the principal HBM revenue line. The unit grew approximately 4.1x YoY and approximately 78% sequentially. HBM4 (built on 1-beta DRAM) is in high-volume shipments to the lead customer's platform, with qualification samples shipped to multiple additional end-customers.
Core Data Center Business Unit. Revenue of $11.52 billion (gross margin 87%, operating margin 83%) - approximately 7.5x YoY on broad-based DRAM strength, server SSD demand, and the 256GB DDR5 RDIMM qualification samples shipping on 1-gamma DRAM with advanced 3D die stacking.
Mobile and Client Business Unit. Revenue of $11.52 billion (gross margin 87%, operating margin 86%) - approximately 3.5x YoY. LP5X SOCAMM2 in high-volume production, G9-based PCIe Gen6 SSD in volume, and shipments commencing on the 245TB QLC SSD.
Automotive and Embedded Business Unit. Revenue of $4.63 billion (gross margin 79%, operating margin 75%) - approximately 4.1x YoY. 1-gamma DDR5 first samples shipped to a robotaxi customer; G9-based UFS 4.1 automotive NAND began first volume shipments.
Product roadmap. HBM4E development on 1-gamma DRAM is well underway with volume production targeted for calendar 2027. Combined with the Strategic Customer Agreements, this positions Micron for sustained high-margin revenue through the back half of the decade.
84.6% gross margin, $22B customer deposits.
GAAP gross margin of 84.6% (non-GAAP 84.9%) expanded approximately 47 percentage points YoY and approximately 10 percentage points sequentially. The structural step-up reflects (a) pricing leverage across DRAM, HBM and NAND, (b) richer Cloud Memory and Core Data Center mix carrying 83% to 87% segment gross margins, and (c) operating leverage as capacity scales against largely fixed cost.
GAAP operating expenses of $1.74 billion (R&D $1.32 billion, SG&A $0.41 billion) were up about 30% YoY but well below the 346% revenue growth, generating substantial operating leverage. GAAP operating income reached $33.32 billion (operating margin 80.4%), an extraordinary level reflecting both pricing and scale benefits.
The most notable disclosure was the June 22, 2026 announcement of a multi-year strategic agreement with Anthropic spanning memory and storage AI architecture co-design, supply commitments across HBM, DRAM and SSD, enterprise Claude adoption across Micron, and a strategic investment in Anthropic's Series H funding round. Under that arrangement, Micron is positioned as Anthropic's primary memory and storage supplier - the first of its kind in the memory industry and a structural marker that the AI memory cycle is being underwritten by multi-year customer commitments rather than spot pricing.
Capital returns. The Board declared a quarterly dividend of $0.15 per share (payable July 21, 2026, to shareholders of record July 6, 2026) and management stated the company will return 100% of excess cash to shareholders going forward, signaling significantly higher capital returns ahead. Nine-month FY26 capital expenditures of $19.6 billion (versus $10.2 billion in the prior-year period) reflect the aggressive supply build to meet AI memory demand. Buybacks under the existing program totaled $650 million in the first nine months of FY26.
Q4 guide $7B above consensus.
| Metric | Q4 FY2026 Guidance | Change vs. Prior |
|---|---|---|
| Revenue | $50.0B +/- $1.0B | About $7B above consensus |
| GAAP / Non-GAAP Gross Margin | Approximately 86% / 86% | Up from 84.6% / 84.9% in Q3 |
| GAAP Operating Expenses | Approximately $1.86B | Continued R&D investment |
| Non-GAAP Operating Expenses | Approximately $1.65B | In line with run-rate |
| GAAP Diluted EPS | $30.73 +/- $1.00 | Implies +25% QoQ at midpoint |
| Non-GAAP Diluted EPS | $31.00 +/- $1.00 | Implies +24% QoQ at midpoint |
| Dividend | $0.15 per share quarterly | Declared June 24, 2026 |
| Capital Return Policy | 100% of excess cash | New formal commitment |
Surprises and their stock-price implications
- Revenue beat of approximately $6.8 billion. The print exceeded the high end of management's own Q3 outlook and delivered roughly 19% upside to consensus, an unusually large beat for a company already trading at record valuation going into the print.
- Q4 FY26 revenue guide of $50.0 billion plus or minus $1.0 billion. Approximately $7 billion above consensus expectations and an implied 21% sequential growth from an already record Q3.
- $22 billion of cash deposits under Strategic Customer Agreements. A first-of-its-kind disclosure that materially de-risks forward revenue visibility. Customers are effectively pre-paying for capacity, signaling severe industry-wide memory supply tightness. The Anthropic strategic agreement announced June 22 is the marquee example, covering supply, co-design and a Micron equity investment in Anthropic's Series H round.
- Q4 gross margin guide of approximately 86%. A continued step-up from 84.6% in Q3 GAAP. This is the highest memory-industry gross margin on record and reflects pricing leverage Micron and peers have not seen since the early 2000s.
- HBM4 in high-volume shipments. Lead customer ramp is already underway, with qualification samples shipped to additional customers. The pace is described as twice as fast as HBM3E 12-high ramp.
- 100% of excess cash to be returned. A formal commitment to return all excess cash to shareholders. Combined with the $22 billion customer deposits and $30.2 billion balance sheet cash, this signals significantly larger buybacks ahead.
- Operating margin of 80.4% GAAP. An extraordinary level reflecting the combination of pricing, mix and scale. Q4 guidance implies this expands further as gross margin steps up.
Strong Buy holds, Street-high $1,500 at BofA.
MU shares closed June 24 at approximately $1,057.59, having traded between an intraday low of $1,054.13 and an intraday high of $1,105.00. In after-hours trading following the print, shares advanced approximately $78.79 in dollar terms (roughly +7.4%) to approximately $1,136 on the blowout results and the $7 billion Q4 guide raise. The 52-week range is approximately $103.38 (low set August 1, 2025) to $1,213.56 (high set June 22, 2026), reflecting the extraordinary roughly 10x re-rating year to date as memory pricing and HBM demand structurally exceeded the consensus expectations of late 2025. Market capitalization stands near $1.2 to $1.3 trillion at the after-hours level.
Analyst recalibration
Wall Street consensus has been racing to keep up. TipRanks shows a consensus Strong Buy based on 24 Buy, 2 Hold, and 0 Sell ratings. The dispersion of 12-month price targets is unusually wide, ranging from approximately $1,015 (lower quartile) to $1,297 (upper quartile), with a Street-high target of $1,500 (Bank of America, raised from $950 on June 23) and a low of approximately $850.
Cycle reversal, competition, valuation.
Primary risks
- Memory cycle reversal. Memory is historically the most cyclical end-market in semiconductors. The current cycle is being structurally extended by HBM and AI demand, but any meaningful supply addition (Samsung, SK Hynix, or smaller players accelerating capex) could compress pricing.
- HBM4 competitive position. SK Hynix and Samsung are direct HBM competitors. Micron's lead-customer position is strong but maintaining yield, quality and roadmap leadership is essential.
- Customer concentration. A small number of hyperscale and AI-platform customers represent a disproportionate share of Cloud Memory and Core Data Center revenue. The Strategic Customer Agreements mitigate this for the near term but do not eliminate the long-term exposure.
- Capital intensity. Nine-month FY26 capex of $19.6 billion is roughly double the prior-year period. Sustaining this pace requires either continued strong pricing or significant government incentives. The CHIPS Act and similar international programs help but introduce policy dependency.
- Valuation. MU trades at roughly 8x to 9x forward earnings on FY27 estimates - not stretched in absolute terms, but FY27 earnings expectations have been revised dramatically higher in a short window. The risk is consensus over-shooting and earnings normalizing more sharply than expected in fiscal 2028.
- Geopolitical exposure. Significant manufacturing exposure to Taiwan, Japan and Singapore creates supply-chain and geopolitical risk in any escalation scenario.
Catalysts to watch
- HBM4E volume production timing (currently calendar 2027).
- Additional Strategic Customer Agreement disclosures and cumulative cash deposit growth (Anthropic deal signed June 22 is the marquee precedent).
- Q4 FY26 print in late September 2026 and initial FY27 guidance commentary.
- Capital return acceleration under the new 100% excess cash commitment.
- Industry capex commentary from Samsung and SK Hynix.
- AI hyperscaler capex cycle commentary at NVIDIA and the major cloud platforms.
- Government incentive milestones (CHIPS Act, Japan, EU semiconductor packages).
Micron delivered the cleanest memory-industry print on record: revenue more than quadrupled YoY, gross margin pushed past 84%, the Q4 guide came in $7 billion above consensus, and the Strategic Customer Agreements signal multi-year revenue visibility never before seen in memory. With a Strong Buy consensus, 12-month average price targets in the $1,015 to $1,297 range (Street-high $1,500 at Bank of America), and a new formal commitment to return 100% of excess cash to shareholders, MU remains a core high-conviction holding for AI infrastructure exposure. The bar to outperform from current levels is high, but the cycle dynamics, HBM4 leadership and customer pre-payment structure argue that the cycle peak is being pushed out, not pulled in. We continue to hold MU with appropriate position sizing given the inherent cyclicality of the memory industry.
Ready to Get Started? Create Your Customized Financial Game Plan.
Before we can build a plan to help you meet your financial goals, we’ll take the time to get to know you and your financial vision. In this short exercise, answer questions about yourself and your future objectives. Then, request a consultation so that together, we can build a plan to help you get there.
