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Micron posts record $54.2 billion quarter as AI-driven memory demand outpaces supply
Micron's fiscal fourth-quarter revenue reached $54.23 billion, up from $11.32 billion a year earlier, on demand for memory in AI data centers. Guidance of about $61.5 billion for the next quarter makes memory pricing a cost that teams building AI hardware should plan for through 2027.
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What happened
- Fiscal 2026 revenue, for the year that ended September 3, was $133.19 billion, up from $37.38 billion the year before.
- Core Data Center ($18.00 billion) and Cloud Memory ($16.28 billion) produced about 63% of fourth-quarter revenue, according to mezha.net.
- Revenue from Micron's server LPDDR SOCAMM modules more than doubled from the third fiscal quarter to the fourth.
- Micron's 7600 PCIe Gen 5 and 9650 PCIe Gen 6 SSDs are now shipping to what it calls market-leading customers for KV-cache applications.
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Why it matters
- cost About 70 cents of each dollar Micron collected last quarter was net income, so at current prices the memory line in an AI server budget is mostly supplier margin.
- decision Hardware teams now choose between the long-term supply agreements Micron's CEO credits for durable revenue and quarter-by-quarter buying from a supplier that is guiding higher.
- exposure A buyer who commits multi-year volume at today's prices carries the loss if Micron's added capacity arrives and prices fall before the contract ends.
- constraint Memory allocation can set a cluster's delivery date even when the accelerators are in hand, according to mezha.net's reading of the HBM and DRAM shortage.
Revenue in memory is bits shipped multiplied by price per bit. The split between the two has to be inferred from what Micron reports [1]. Margin is the nearest proxy, and I think a high one mostly reflects price. Fourth-quarter GAAP net income was $37.70 billion, or $32.87 per diluted share [3], about 69.5% of revenue [1].
The forward numbers point the same way. "Micron delivered record fiscal 2026 results, and we expect an even stronger fiscal 2027," said Sanjay Mehrotra, Micron's chairman and chief executive [6]. According to mezha.net, the company's revenue guidance for the fiscal first quarter of 2027 runs $1.5 billion either side of a $61.5 billion midpoint, with non-GAAP earnings of $38.15 a share, plus or minus $1 [5]. The midpoint is about 13.4% above the quarter just reported [2]. The bottom of the range, $60.0 billion, would still be 10.6% higher [3].
Mehrotra also said "AI is becoming Super Intelligence (SI)" [8]. The guidance figures hold up without the rebrand. For a buyer, his more useful sentence is about contracts. Mehrotra said "our Strategic Customer Agreements provide added confidence in the durability of Micron's financial performance" [7]. Durable revenue for the seller is committed spend for the customer who signed. Reuters reported that customer commitments under long-term supply contracts rose to $32 billion, according to mezha.net [10]. That sum is about 59% of one quarter's revenue at the fourth-quarter rate [4].
For "even stronger" to show up as a 2027 price on a purchase order, demand has to keep running ahead of supply [6]. Mezha.net reports that demand for DRAM, HBM and server memory for AI is still outpacing supply [11]. Capacity is the other side. "We are increasing our investments in technology, products and manufacturing," Mehrotra said [9]. Net capital expenditure was $10.77 billion in the quarter and $27.37 billion for the year [12], about 20.5% of annual revenue [5]. The same report notes that the memory industry has historically been cyclical, and that a sharp expansion in production can ease a shortage and push prices down [13].
In my view, a team specifying AI servers for 2027 should hold memory at today's prices in its cost model and count relief from new capacity as upside. My context is a buyer without a long-term agreement whose only forward figures are Micron's own guidance [5]. Neither source gives a date for when the added capacity reaches customers.
What to watch
- Capacity timing in Micron's prepared remarks and slides; a ship date for new output inside 2027 would weaken the case for holding memory budgets at today's prices.
- The fiscal first-quarter 2027 result against the $60.0 billion to $63.0 billion guidance range, where a print near the bottom would be the first sign of easing.
- Any disclosed terms for Micron's Strategic Customer Agreements, including duration, volume and whether prices are fixed.