Demand for AI memory continues to explode, Micron (MU.US)'s fourth fiscal quarter results exceeded expectations, and quarterly revenue from the data center core business increased more than tenfold year-on-year

The Zhitong Finance App learned that memory chip giant Micron Technology (MU.US) announced results for the fourth quarter of fiscal year 2026 after the market on Wednesday. Both revenue and profit surpassed Wall Street expectations, and gave stronger performance guidance for the next quarter than market expectations. As global artificial intelligence infrastructure continues to drive demand for high-bandwidth memory (HBM), DRAM, and data center storage, Micron expects its performance to further strengthen in the 2027 fiscal year.

Micron's fourth fiscal quarter revenue reached $54.23 billion, up from the previous quarter's $41.46 billion, and far higher than the same period last year of $11.32 billion; non-GAAP diluted earnings per share reached $33.42, compared to only $3.03 for the same period last year. According to analysts' unanimous expectations, Wall Street previously expected Micron's revenue for the quarter to be US$51.49 billion, with earnings per share of US$31.83.

According to GAAP calculations, Micron's net profit for the quarter reached 37.7 billion US dollars, and diluted earnings per share were 32.87 US dollars; non-GAAP net profit reached 38.4 billion US dollars. The adjusted gross margin rose to 87%, a further increase from 84.9% in the previous quarter, and far higher than 45.7% in the same period last year.

Sanjay Mehrotra, Chairman and CEO of Micron, said the company achieved record results in FY2026 and is expected to further strengthen its performance in the 2027 fiscal year. The company is increasing its investment in technology, products and manufacturing capabilities to meet the growing needs of its customers.

Revenue guidance for the next quarter was as high as $63 billion and surpassed market expectations

What has received more attention from the market than the fourth quarter results is the latest performance forecast given by Micron. Micron expects revenue for the first quarter of fiscal year 2027 to be US$61.5 billion, fluctuating up and down US$1.5 billion, or US$60 billion to US$63 billion; non-GAAP diluted earnings per share are expected to be US$38.15, fluctuating up and down US$1; and adjusted gross margin is expected to be approximately 86.25%.

This guidance was significantly higher than market expectations. The media quoted analyst data as saying that the market previously expected Micron's revenue for the first fiscal quarter to be about US$57.02 billion and adjusted earnings per share of about US$35.40. This also means that even after experiencing rapid growth in FY2026, Micron expects demand for AI-driven memory chips to continue in the new fiscal year.

The data center business exploded, and the quarterly revenue of the core business increased more than tenfold year-on-year

AI data centers have become the core driving force behind Micron's performance growth. In the fourth fiscal quarter, Micron Cloud Memory Business Unit's revenue reached US$16.28 billion, up from US$13.77 billion in the previous quarter and US$4.54 billion in the same period last year.

The increase was even more significant in the Core Data Center Business Unit. The division's revenue for the fourth fiscal quarter reached US$18 billion, compared to US$11.52 billion in the previous quarter, compared to only US$1.58 billion in the same period last year, which is equivalent to a 10-fold increase in one year. The gross margin of the business reached 90% and the operating profit margin reached 85%.

As global technology companies build AI data centers on a large scale, demand for DRAM, high-bandwidth memory, and high-speed flash memory continues to grow. HBM is an important part of AI accelerators such as Nvidia, and large-scale AI servers and data centers simultaneously require a large number of high-speed storage products, and Micron covers both types of markets.

According to media reports, Micron's current demand for AI-related memory products has far exceeded its current production capacity. Big tech companies, including Amazon and Alphabet, are still investing in AI infrastructure on a large scale this year, providing continued demand for HBM and other high-performance storage products.

FY2026 revenue exceeded 130 billion US dollars, and net profit increased sharply year-on-year

Looking at full-year performance, Micron's 2026 growth rate was even more prominent. The company's annual revenue reached US$133.19 billion, more than tripling from US$37.38 billion in fiscal year 2025; GAAP net profit reached US$84.97 billion, compared to US$8.54 billion in the previous fiscal year.

Non-GAAP net profit reached $86.76 billion, or $75.52 per diluted share, a significant increase from $8.29 in the previous fiscal year. Operating cash flow for the year reached US$89.68 billion, far higher than the previous fiscal year of US$17.53 billion.

Micron's net capital expenditure for the fourth fiscal quarter was US$10.77 billion, reaching US$27.37 billion for the full year; adjusted free cash flow reached US$33.2 billion in the fourth quarter, reaching US$62.31 billion for the full year. As of the end of the fiscal year, the total amount of cash, valuable investments and restricted cash held by the company was US$73.48 billion.

Adding next-generation storage products to bet on long-term AI needs

In the face of growing demand for AI computing, Micron is further expanding its investment in technology and manufacturing.

The company said that the revenue of the LPDDR SOCAMM product portfolio of servers more than doubled month-on-month in the fourth fiscal quarter. At the same time, it has begun to send samples of the industry's first 512GB ultra-high-capacity DDR5 RDIMM, with a transmission speed of up to 9200 MT/s.

In addition, Micron's high-speed server RDIMM, which is based on the 1-gamma process, has completed multiple customer certifications, and 7600 PCIe Gen 5 and 9650 PCIe Gen 6 SSDs have also been shipped to major customers for AI applications such as KV-Cache. The company also said that its AI workstation products have been designed and adopted by all Tier 1 OEM customers.

In August of this year, Micron also announced that it will invest up to $10 billion in the next 10 years to build Micron Research Labs in Boise, Idaho, and bet on next-generation storage and AI technology research and development.

The AI boom is also driving the entire memory chip industry into a boom cycle. In addition to Micron, Samsung Electronics and SK Hynix are also benefiting from rapid growth in demand for HBM and DRAM. However, the sharp rise in memory prices has also begun to spread to the consumer electronics industry, and smartphone and PC manufacturers are facing higher component cost pressure.

The stock price soared by about 550% in a year, and the market focuses on the sustainability of the AI memory boom

Driven by the explosion in AI memory demand, Micron's stock price has risen by about 275% since this year, with a cumulative increase of about 550% over the past 12 months, making it one of the most prominent semiconductor stocks in the AI infrastructure boom.

After the announcement of strong results, the stock price of Micron Disc rose slightly for a while. According to the latest after-market data, Micron reported around $1071.92, up about 0.6% from the closing price of the regular trading session.

Despite recent market discussions on the scale of AI investment, the development of cutting-edge AI models, and the sustainability of huge data center capital expenditure, Micron's latest results show that demand for AI infrastructure remains strong, at least in the memory chip sector.

The company's fourth-quarter revenue increased nearly fourfold year-on-year, and the data center business expanded rapidly. At the same time, revenue guidance for the next quarter was once again significantly higher than market expectations. As demand for HBM, server DRAM, and high-speed data center SSDs continues to grow, whether AI infrastructure construction can maintain current investment intensity, and whether Micron can maintain high gross profit margins while expanding production capacity, will be the next focus for investors.