Micron Technology guided its fiscal fourth quarter to $50 billion in revenue. That number, issued on June 24, exceeded Wall Street’s prior consensus by roughly $6.5 billion. The company forecast gross margin of roughly 86% and diluted EPS of $31.00, plus or minus $1.00, on a non-GAAP basis. Read that twice: $31 per share, in three months.
The stock has recently traded around $975. The 52-week high is $1,255, so the stock has given back about 22%.
Why This Stock Now
Micron will release its next earnings report on September 30, 2026. Seventeen days. The company has guided to what would be its fifth consecutive quarterly revenue record, and analysts are still underestimating the scale of what has happened to this business. The divergence between the reported numbers and the stock price creates one of the more specific opportunities in semiconductors heading into year-end.
The Business
Micron has been one of the biggest beneficiaries of the AI boom, which has caused historic demand for memory. Its stock price is up several hundred percent over the past year, lifting the company’s market cap past $1 trillion. But the market has started discounting the future rather than the present.
The memory chipmaker posted record quarterly revenue of $41.46 billion in fiscal Q3, representing year-over-year growth of roughly 345%, while guiding for an even stronger Q4 with revenue potentially reaching $50 billion. Gross margin has surged to about 81%, up from roughly 27% a year ago. This is not a company that moved faster than expected. It is a company where the entire pricing environment for its products reset upward.
Why Wall Street Is Paying Attention
Micron says its strategic customer agreements have moved more of its demand into multi-year commitments, and management has described those agreements as take-or-pay contracts with binding volume commitments. That changes the cyclicality argument fundamentally.
Micron closed the third quarter with $5.7 billion of debt and a net cash balance of $24.4 billion. This fiscal year, the company received upgrades from all three major credit rating agencies, including an upgrade to BBB+.
What’s Driving the Opportunity
If the fiscal fourth quarter lands at the guide’s midpoint, fiscal 2026 will close with about $129 billion of revenue, nearly 3.5 times fiscal 2025’s total. GAAP earnings per share would land near $72, up from $7.59 the year before.
Micron trades at about 21 times earnings. Measured against a full year at the guided quarter’s pace, the stock costs about 8 times earnings. The market is treating the current profit level as temporary. Management’s take-or-pay contracts argue it is not.
What Could Go Wrong
Memory has betrayed investors before. Investors are treating these profits as a cyclical peak, and arguably with reason. This is the same business that lost $5.8 billion just three years ago. In fiscal 2023, the bottom of the last memory downturn, revenue fell by about half, to $15.5 billion. A slowdown in hyperscaler capital spending, or a meaningful supply response from Samsung or SK Hynix, could compress margins faster than the contracts suggest.
Micron CEO Sanjay Mehrotra has acknowledged that supply shortages in memory and storage will take considerable time to improve, and has discussed a multi-year timeline for supply to catch up.
The Bottom Line
The September 30 report is the near-term catalyst. Micron said demand for memory tied to artificial intelligence remains strong and supply is likely to stay tight for years. A company guiding to $31 in quarterly EPS, with locked-in customer commitments, trading at 8 times annualized run-rate earnings, is either the most mispriced large-cap in semiconductors or proof that the market correctly smells a cycle turn. The Q4 results will make one of those arguments much harder to hold.
