Micron revenue quadruples as AI memory demand lifts gross margins above 81%

Micron Technology delivered a stunning fiscal third-quarter performance, with revenue surging to nearly $42 billion, a fourfold increase from the roughly $9 billion reported a year earlier. The results, released on Tuesday, far surpassed Wall Street expectations, underscoring the company’s dominant position in the AI memory boom. Micron’s stock, which has already climbed about 700 percent over the past year, reflects this momentum.

Adjusted earnings exceeded $25 per share, beating analyst forecasts of around $21. On a GAAP basis, net income topped $28 billion, or nearly $25 per share, a dramatic jump from under $2 billion in the same quarter last year. Gross margins soared above 81 percent, up from 69 percent in the prior quarter and 27 percent a year earlier, highlighting the profitability surge driven by AI demand.

The headline figure was revenue, which hit nearly $42 billion against a consensus estimate of roughly $36 billion. This growth was fueled almost entirely by skyrocketing demand for high-bandwidth memory (HBM), the stacked DRAM chips essential for AI accelerators from Nvidia and Google. HBM has become a critical bottleneck in AI infrastructure expansion, and Micron is one of only three global suppliers capable of producing it.

CEO Sanjay Mehrotra noted that Micron can currently meet only 50 to 66 percent of customer demand for HBM. The company’s entire 2026 HBM supply is already sold out under multi-year contracts, and it has collected $22 billion in customer cash deposits, effectively prepayments from hyperscalers eager to secure supply.

Micron’s next-generation HBM4 chips are ramping at twice the speed of the previous HBM3E generation, with HBM4 revenue already exceeding one billion dollars. These chips are vital for the latest accelerators from Nvidia and Google, where memory bandwidth, not raw compute, increasingly determines inference performance.

The forward guidance was equally aggressive. Micron projected fiscal fourth-quarter revenue of approximately $50 billion, plus or minus one billion, well above analyst estimates of roughly $44 billion and a year-ago figure of just over $11 billion. The company raised its full-year capital expenditure forecast to more than $25 billion, up from a previous target of $20 billion, to expand production capacity for HBM and advanced DRAM.

Micron’s market capitalization crossed one trillion dollars on May 26, making it the latest memory chipmaker to reach that milestone as the AI-driven memory supercycle reshapes semiconductor valuations. The stock’s roughly 700 percent gain over the past year reflects a market that now views memory not as a cyclical commodity but as structural AI infrastructure.

The company expects the total addressable market for HBM to grow at a compound annual rate of roughly 40 percent through 2028, rising from approximately $35 billion in 2025 to around $100 billion. Micron plans to return 100 percent of excess free cash flow to shareholders, a commitment enabled by its cash deposit program, which reduces the capital risk of expansion.

There are caveats to consider. Micron remains the smallest of the three HBM suppliers, trailing SK Hynix and Samsung, and its share of Nvidia’s HBM4 allocations is the thinnest. The broader memory market is also shifting, with Chinese manufacturers like CXMT expanding aggressively into consumer DRAM segments that the Big Three have deprioritized in favor of AI chips.

Memory pricing is inherently cyclical, and the current supercycle depends on hyperscaler capital expenditure continuing at its current pace. If AI infrastructure spending slows or HBM supply catches up with demand, the margins Micron reported this quarter would compress rapidly. The 81 percent gross margin is historically extraordinary for a memory company and reflects shortage economics as much as product superiority.

For now, the numbers speak for themselves. Revenue that quadruples in a year, margins that triple, and a guidance print that exceeds estimates by more than $6 billion are not normal results for any company, let alone one that was losing money two years ago. Micron’s earnings confirm that the AI memory shortage is intensifying, not easing, and that the companies making the chips inside AI accelerators are capturing value at a rate the market is still recalibrating to price.