Dear Reader,
Good morning.
Simmy Adelman here with Behind the Markets.
This week, Micron reported earnings.
And the numbers almost don't look real.
Revenue came in at $54.23 billion for the quarter.
Up 379% from a year ago.
Adjusted EPS of $33.42 — beating Wall Street by more than 7%.
Gross margin of 87%.
A record.
For the full fiscal year 2026, Micron generated $133.2 billion in revenue.
Up 256% from the prior year.
Full year earnings per share of $75.52.
Up 811%.
Six consecutive quarterly revenue records.
And next quarter guidance of $61.5 billion — well above the $55 billion Wall Street was expecting.
Why This Matters
I know a lot of people have been nervous about the AI trade this month.
Yields at 24-year highs.
Oil above $100.
The bond market having its worst quarter in decades.
But Micron just answered every one of those concerns with one earnings report.
Data center revenue quadrupled year over year.
HBM — the high bandwidth memory that powers Nvidia's most advanced AI chips — grew even faster than the overall company.
And here's the detail that tells you everything about where we are in this cycle.
Micron's HBM supply for all of 2027 is already largely contracted at significantly higher prices.
They haven't shipped a single chip yet in 2027 and the order book is already full.
That is not a company in a slowing market.
That is a company that cannot build fast enough.
We Saw This Coming
We actually recommended Micron to our BTM subscribers in 2022, when the stock was trading at a fraction of where it is today.
The thesis was simple.
The world was going to need more memory than it could imagine.
AI was going to be the biggest driver of that demand in history.
And Micron — one of only three companies on earth that can make advanced DRAM chips — was going to be right in the middle of it.
Last night's numbers are that thesis playing out in real life.
$133 billion in annual revenue.
811% earnings growth.
And an order book for next year that's already full.
The Stock Traded Flat
Here's the one wrinkle worth noting.
Despite the blowout results and the stronger-than-expected guidance, Micron's stock traded essentially flat after hours.
The market is wrestling with one thing.
Micron is spending heavily to keep up with demand — and investors want to see that spending translate into sustained free cash flow, not just revenue growth.
That's a fair concern.
But here's what I keep coming back to.
When a company's supply is already spoken for twelve months in advance at higher prices, the free cash flow question tends to answer itself.
Memory has traditionally been cyclical.
Boom and bust.
The question every analyst is asking right now is whether AI has structurally changed that — whether the demand is durable enough to keep Micron out of the bust phase that has always followed the boom.
Last night's numbers suggest the answer is yes.
But we'll see.
The Bigger Picture
We've been hearing all month that the AI trade is in trouble.
Yields too high. Oil too expensive. Hyperscaler debt getting riskier.
All of that is real and worth watching.
But Micron just told you something important.
The companies actually buying AI infrastructure — the data centers, the cloud providers, the hyperscalers — are not slowing down.
They are accelerating.
And the memory that makes all of it run is sold out a year in advance.
The party may be getting later.
But the music is still playing.
And there are still massive opportunities out there.
The one I keep coming back to is the little-known company powering Nvidia’s most powerful chips.
Every chip Nvidia designs to power these data centers.
Every custom AI accelerator Google, Amazon, and Apple build.
Every smartphone chip Qualcomm and Samsung manufacture.
All of them run on the same underlying architecture..
And this one quiet company owns that architecture.
In fact, Nvidia tried to buy them outright.
The FTC blocked the deal because Qualcomm, Microsoft, and Google all threw a fit.
They said Nvidia would be too powerful if it controlled this company.
That is how important this company is.
And yet most investors have never heard of it.
Have a wonderful weekend.
All the best,
Simmy Adelman, Editor-in-Chief
Behind the Markets
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Written by Simcha Adelman