Micron posts record memory profits as AI demand reshapes the chip cycle

Micron Technology just put up the kind of quarter that makes spreadsheets look broken. Revenue for fiscal Q4 2026 hit $54.23 billion, a 379% jump from the same period a year earlier.

And yet the stock trades at roughly 11 to 14 times trailing earnings. The market is applauding politely while keeping one hand near the exit.

The numbers behind the record

The quarter ended around September 3, 2026. It capped a full fiscal year in which Micron brought in $133.19 billion in revenue, up 256% year over year.

For the first time, the company’s DRAM revenue crossed the $100 billion mark. DRAM is the short-term working memory that computers and servers lean on to juggle active tasks, and right now AI data centers can’t get enough of it.

Profitability kept pace with the top line. Gross margin landed at about 87% in the fourth quarter, and operating margins topped 80%.

GAAP net income came in at $37.70 billion for the quarter. Non-GAAP earnings per share reached $33.42.

Most of the growth came from Micron’s data center business units, which posted margins between 83% and 90%.

The product list driving demand reads like a data center shopping cart: high-bandwidth memory (HBM), DRAM, NAND flash, and data center SSDs. HBM is the standout. Think of it as memory stacked vertically and placed right next to an AI processor so data doesn’t have to travel far, which matters when chips are chewing through massive models.

Micron says HBM shipments are expanding across a growing roster of customers. The majority of its calendar 2027 HBM supply has already been contracted, at higher prices than the year before.

Contracts as a cycle-breaker

CEO Sanjay Mehrotra pointed to 26 Strategic Customer Agreements, or SCAs, that Micron has signed. These deals give the company visibility into revenue and lock in commitments for a significant share of output through 2027 and beyond.

More than 75% of Micron’s fiscal 2027 output is already committed under these agreements. The contracts include price protections and carry substantial remaining performance obligations, meaning customers have signed up to buy a lot of product that hasn’t shipped yet.

Supply tightness is expected to persist beyond calendar 2027, which supports the case that buyers are signing long-term deals because they’re worried about getting shut out.

Guidance points higher still

Micron isn’t signaling a slowdown in the near term. For the first quarter of fiscal 2027, the company guided revenue to a range of $60 billion to $63 billion.

That would top the record quarter it just reported. Management also expects sequential growth to continue throughout fiscal 2027.

Why the market is still skeptical

A trailing multiple of roughly 11 to 14 times earnings is the market’s way of saying it doesn’t fully trust these profits to last. Investors have seen memory upcycles before, and they have also seen what happens when the cycle turns.

The worry is familiar. Strong pricing encourages heavy investment, new capacity eventually comes online, and the resulting oversupply can crush prices and margins.

The counterargument rests on those SCAs. If more than three-quarters of next year’s output is already spoken for, with price protections attached, a sudden collapse in Micron’s revenue becomes harder to imagine over that window.

What this means

The key thing to watch is how those Strategic Customer Agreements perform under pressure. Price protections and performance obligations look great on paper during a shortage, but their real test comes if demand cools or competitors add capacity.

Micron’s ability to secure the majority of its calendar 2027 HBM supply at higher year-over-year prices gives it a strong position in the fastest-growing part of the market.

The risks haven’t vanished. Memory remains a capital-intensive industry exposed to cyclical downturns, and a slowdown in AI infrastructure spending would hit the data center units that now generate the bulk of Micron’s growth.