Good: Micron beats and guides higher on AI memory demand; margins jump

Good — Micron topped expectations and issued stronger guidance, powered by AI data‑center memory. Fiscal Q4 revenue was $11.32B and non‑GAAP EPS was $3.03, both above LSEG consensus ($11.22B and $2.86). Non‑GAAP gross margin rose to 45.7%, the highest of the cycle so far. (investors.micron.com)

The outlook was the standout: Micron guided fiscal Q1 (FY26) revenue to $12.5B ± $300M, EPS to $3.75 ± $0.15, and non‑GAAP gross margin to 51.5% ± 1 pt — all ahead of Street revenue and margin expectations. (investors.micron.com)

Shares ticked higher after hours (roughly 1–2%) following the beat and strong guide. (barrons.com)

AI data center momentum. High‑bandwidth memory (HBM, a fast, stacked form of DRAM used with leading AI chips) was the growth engine. HBM revenue reached nearly $2B in Q4 (an ~$8B annualized run rate), and Micron expects to sell out its 2026 HBM supply in the coming months. Data center was 56% of FY25 revenue; within Q4, the Cloud Memory unit (which includes HBM and cloud server DRAM) did $4.54B and made up 40% of company sales. (investors.micron.com)

Pricing and mix lifted margins. DRAM was 79% of Q4 revenue; DRAM bit shipments grew in the low‑teens percentage range quarter over quarter and prices (ASPs) rose in the low‑double‑digit range. NAND bits fell mid‑single digits but prices rose high‑single digits. The mix shift and pricing gains pushed non‑GAAP gross margin to 45.7% (from 39.0% in Q3 and 36.5% a year ago). Gross margin means profit after production costs. (investors.micron.com)

Cash and investment. Q4 adjusted free cash flow was $803M; Micron spent $4.93B (net) on capex in the quarter and $13.8B for FY25. Management plans higher FY26 capex, with about $4.5B in Q1, to support the HBM and 1‑gamma DRAM ramps. (investors.micron.com)

Micron beat Street estimates and even topped its own August update (which had already raised Q4 revenue and margin targets to $11.2B and ~44.5%). (cnbc.com)

Growth was broad versus last year: revenue +46% y/y (and +22% q/q), non‑GAAP EPS up from $1.18 a year ago to $3.03, and margins widened sharply. Cloud Memory revenue more than tripled year over year; however, the Core Data Center unit was down vs. last year, a reminder that demand is strongest in the newest, AI‑focused products. (investors.micron.com)

Backdrop: management sees tight DRAM supply, stronger traditional server demand, and stable-to-improving PC trends (helped by AI PCs and Windows 10 end‑of‑life). Smartphone units remain low‑single‑digit growth but with rising memory content. These conditions support Micron’s above‑trend near‑term margin outlook. (investors.micron.com)

Figures are non‑GAAP where noted; guidance is for fiscal Q1 (FY26).

HBM road map and customer pull. Micron is sampling HBM4 with claimed industry‑leading bandwidth and will offer HBM4E with customizable base logic dies (via a TSMC partnership). Management says most 2026 HBM3E supply is already priced and expects to sell out remaining 2026 HBM volumes soon. Execution on these ramps will be key to sustaining >50% gross margins. (investors.micron.com)

Spending vs. returns. Capex will run higher in FY26 as Micron expands HBM and 1‑gamma DRAM capacity; management also flagged Q1 capex around $4.5B. Stronger free cash flow is expected in FY26, but watch for any demand or pricing hiccups that could pressure returns. (investors.micron.com)

Policy and incentives. Micron received a CHIPS Act grant disbursement tied to its Idaho fab progress; ongoing U.S. policy around chip incentives and potential tariffs remains a swing factor for long‑term U.S. capacity plans. (investors.micron.com)