Key Points
Micron reported record fiscal fourth-quarter revenue of $54.23 billion, up 379% from $11.32 billion a year ago and well ahead of the $51.07 billion analysts expected.
Adjusted earnings came in at $33.42 per share versus the $31.61 Wall Street expected, and adjusted gross margin hit a record 87.0%.
Micron guided to about $61.5 billion in revenue next quarter, far above the roughly $57 billion analysts were looking for.
The Fed's favorite inflation gauge cooled. August PCE rose 3.4% from a year ago, below the 3.7% forecast, and the odds of an October rate hike fell to about 35%.
Stocks gave up early gains as yields rose. The S&P 500 slipped 0.25% and the Dow fell 0.86%, while the Nasdaq edged up 0.24%.
Micron just earned more money in one quarter than it brought in during all of fiscal 2025.
After the closing bell Wednesday, the memory chipmaker reported fiscal fourth-quarter revenue of $54.23 billion. A year ago, that number was $11.32 billion. For all of fiscal 2025, it was $37.38 billion.
Micron's net income for the quarter was $37.70 billion. That is more than four times what it earned in the entire prior fiscal year.
And the stock? Micron closed the regular session flat at $1,065.11. In extended trading, shares swung around and were recently down about 1% near $1,053.
The Numbers Behind the Record
Here is how Micron did against the LSEG consensus:
Revenue: $54.23 billion, versus $51.07 billion expected and up from $41.46 billion last quarter
Adjusted EPS: $33.42, versus $31.61 expected (up from $3.03 a year ago)
Adjusted gross margin: a record 87.0%, versus 45.7% in the same quarter last year
Operating cash flow: $43.97 billion
Every one of Micron's four business units grew. Its Core Data Center unit brought in $18.0 billion, up from $1.58 billion a year ago. Cloud Memory, which includes the high-bandwidth memory (HBM) that sits next to Nvidia's AI chips, came in at $16.28 billion.
For the full fiscal year, revenue hit $133.19 billion, up from $37.38 billion.
"Micron delivered record fiscal 2026 results, and we expect an even stronger fiscal 2027," CEO Sanjay Mehrotra said. He added that Micron's long-term Strategic Customer Agreements "provide added confidence in the durability of Micron's financial performance."
The Guidance Was Even Bigger
For the quarter that ends in November, Micron guided to revenue of $61.5 billion, plus or minus $1.5 billion, and adjusted earnings of about $38.15 per share. Analysts polled by LSEG had expected about $57 billion and $35.40.
The one soft spot: Micron guided to an adjusted gross margin of about 86.25%, a hair below the 86.4% some analysts had modeled.
Margins are the whole debate. Memory has always been one of the most cyclical businesses on Earth. When supply catches up with demand, prices collapse. Some analysts expect Micron's growth to slow sharply in fiscal 2027.
Micron's answer is those customer agreements. Back in June, the company said it had signed 16 of them, typically running five years through 2030, with minimum prices built in.
We recently explained how AI just became the biggest economic bet in U.S. history. Micron's results show who is getting paid for it.
Inflation Finally Cooled
Micron wasn't the only good news Wednesday, at least at first.
At 8:30 a.m., the government said the personal consumption expenditures price index, the Fed's preferred inflation gauge, rose 3.4% from a year earlier in August. Economists expected 3.7%. Core PCE, which strips out food and energy, rose 3.0%, below the 3.3% forecast.
"Inflation is cool, what's the hurry?" said Chris Rupkey, chief economist at FWDBonds.
Traders agreed. According to the CME FedWatch Tool, the odds of an October rate hike fell to about 35% from roughly 50% on Tuesday. The Fed meets next on Oct. 27-28.
The other data was strong, too. ADP said private employers added 90,000 jobs in September, above the 68,000 expected. And second-quarter GDP growth was revised up to 2.2%.
But the bond market didn't cooperate. The 10-year Treasury yield rose about 3 basis points to roughly 5.29%, and the 30-year climbed to about 5.63%. Those are still near the highest levels in nearly two decades, as we noted when bond yields first hit that mark.
Oil kept climbing, too. U.S. crude rose about 1% to $90.34 a barrel, and Brent settled near $103.50 as talks between the U.S. and Iran stalled.
That combination erased the morning rally. The upward GDP revision suggested the economy was even stronger in the spring than thought, which kept yields high. The S&P 500 fell 0.25% to 7,651.54, the Dow dropped 443.87 points, or 0.86%, to 50,906.05, and the Nasdaq rose 0.24% to 26,861.06.
The Day's Other Big Movers
United Therapeutics (NASDAQ: UTHR) jumped about 12.6% after a Delaware federal court found that Liquidia infringed on one of its patents. Liquidia (NASDAQ: LQDA) was halted and finished down about 57%.
Rogers (NYSE: ROG) surged about 10.7% after guiding to full-year earnings of about $3.80 per share, above the $3.65 consensus.
FormFactor (NASDAQ: FORM) gained about 9.6% after Deutsche Bank started coverage with a buy rating.
Jabil (NYSE: JBL) fell about 10% despite beating estimates with earnings of $4.40 per share on $10.62 billion in revenue.
Moderna (NASDAQ: MRNA) dropped about 5.4% after Citi downgraded the stock to sell.
Boeing (NYSE: BA) won the $20 billion contract to develop the Navy's sixth-generation F/A-XX strike fighter. Rival Northrop Grumman (NYSE: NOC) fell about 4.2%.
What Lands Next
Thursday: The ISM manufacturing index arrives in the morning. After the close, Nike (NYSE: NKE) reports fiscal first-quarter results. Analysts polled by LSEG expect about $0.43 per share on roughly $11.32 billion in revenue, down about 3% from a year ago. As we noted recently, Nike is down 47% in a year, and expectations are low.
Friday: The September jobs report. Early consensus calls for roughly 85,000 new jobs. It is the last big data point before the Fed's October meeting.
A year ago, Micron was a $11 billion-a-quarter memory company. Now it is guiding to $61.5 billion. The question Wall Street is still asking is whether that is the new normal, or the top.
This article is for informational and educational purposes only and does not constitute investment advice or a recommendation to buy or sell any security.
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