Micron Technology — FQ3 FY2026 Earnings Review
BUY
NASDAQ: MU | Record AI-memory super-cycle: revenue +346% YoY to $41.5B, clean double beat, FQ4 guided to ~$50B / ~$31 EPS, with $100B of non-cancelable take-or-pay backlog reframing the franchise.
FQ3 FY2026 = quarter ended May 29, 2026 · Reported Wednesday, June 24, 2026 ·
FYE late August · Fiscal Q3 (calendar Q2 2026) · All figures non-GAAP unless flagged
Revenue beat
+15.4%
$41.5B vs $35.9B cons; +346% YoY
Non-GAAP EPS beat
+19.7%
$25.11 vs $20.98 cons; +1,215% YoY
Growth trajectory
Accelerating
Rev YoY +196% to +346%; peak accel at latest qtr
FQ4 guide vs Street
+17% / +22%
$50B rev / $31 EPS -- guide low end clears cons
Executive summary -- what is new
Micron delivered the most important memory print in a decade. Fiscal Q3 revenue was a record $41.5B (+346% YoY, +74% QoQ), a fifth consecutive record, beating consensus by +15.4%; non-GAAP EPS of $25.11 beat by +19.7% and is up +1,215% YoY. Non-GAAP gross margin hit a company-record 84.9% -- more than double a year ago -- with all three guided metrics (revenue, gross margin, EPS) clearing the high end of guidance. This is an AI-memory ASP super-cycle: DRAM prices rose low-60s% and NAND mid-80s% sequentially on structurally short supply, with bit shipments nearly flat. Data-center revenue exceeded $25B (>$100B annualized run-rate).
New guidance (FQ4 FY2026): Record revenue ~$50.0B ±$1B (+17% vs ~$42.7B Street; ~+342% YoY), gross margin ~86%, opex ~$1,650M, EPS ~$31 ±$1 (+22% vs ~$25.4 Street). Even the low end ($49B / $30) clears consensus. Implied FY2026 revenue ~$127B vs ~$113.9B Street (+11%), EPS ~$73 vs ~$63 Street (+15%).
Tone -- materially more structural: Strategic Customer Agreements jumped from 1 to 16 (~$100B minimum contracted revenue, ~$22B deposits/commitments with ~$18B cash, five-year take-or-pay, non-cancelable). Tightness window extended from "beyond 2026" to "beyond calendar 2027." HBM TAM now expected to "easily cross $100B in 2027" (pulled from 2028). Capital return committed from Dec 9, 2026 (CHIPS anniversary), with 100% of excess cash targeted via share repurchase. The narrative shifted from "great cyclical up-quarter" to "structurally transformed business model."
Watch items: (1) CEO Sanjay Mehrotra was absent from the most transformative call in company history -- no explanation provided; a genuine management flag. (2) SCA disclosure posture reversed entirely: management refused all specifics in FQ1/FQ2 on confidentiality grounds, then disclosed granular mechanics in FQ3. (3) Gross-margin expansion is decelerating: +110bps guided into FQ4 vs +1,000bps just reported; management flagged "meaningful moderation in the rate of price increases." (4) CapEx guidance has escalated ~50% from initial framework ($18B to $27B) across three quarters. (5) Acceleration this extreme is mathematically unsustainable as FY2027 laps the blow-out -- the real question is durability of the new revenue level.
Upcoming catalysts: FQ4 print (~late Sep 2026) with first full 10-K RPO disclosure; HBM4 12-high volume ramp (~2x faster than HBM3E, >$1B shipped, certified for NVIDIA Vera Rubin); capital-return inflection from Dec 9, 2026; greenfield fabs (Idaho ID1 mid-2027); emerging auto/robotics/edge-AI content as under-modeled optionality. Catalyst calendar is overwhelmingly upside-skewed.
Key metrics and trends (11 quarters)
Standalone fiscal quarters. Revenue and GAAP figures from Daloopa (company_id 136); GM% = gross profit / revenue; YoY = same fiscal quarter prior year. Non-GAAP EPS is the cleaner earnings series. EBITDA = GAAP operating income + D&A.
| Fiscal Qtr | Revenue ($M) | Rev YoY | GM% | GM YoY bps | DRAM ($M) | NAND ($M) | NG EPS |
|---|---|---|---|---|---|---|---|
| FY23Q3 | 3,752 | -- | -17.8% | -- | -- | -- | -1.43 |
| FY23Q4 | 4,010 | -- | -10.8% | -- | -- | -- | -1.07 |
| FY24Q1 | 4,726 | -- | -0.7% | -- | -- | -- | -0.95 |
| FY24Q2 | 5,824 | -- | 18.5% | -- | 4,158 | 1,567 | 0.42 |
| FY24Q3 | 6,811 | +82% | 26.9% | -- | 4,692 | 2,065 | 0.62 |
| FY24Q4 | 7,750 | +93% | 35.3% | -- | 5,326 | 2,365 | 1.18 |
| FY25Q1 | 8,709 | +84% | 38.4% | +3,906 | 6,400 | 2,241 | 1.79 |
| FY25Q2 | 8,053 | +38% | 36.8% | +1,834 | 6,123 | 1,855 | 1.56 |
| FY25Q3 | 9,301 | +37% | 37.7% | +1,089 | 7,071 | 2,155 | 1.91 |
| FY25Q4 | 11,315 | +46% | 44.7% | +938 | 8,984 | 2,252 | 3.03 |
| FY26Q1 | 13,643 | +57% | 56.0% | +1,768 | 10,812 | 2,743 | 4.78 |
| FY26Q2 | 23,860 | +196% | 74.4% | +3,761 | 18,768 | 4,997 | 12.20 |
| FY26Q3 ★ | 41,456 | +346% | 84.6% | +4,684 | 31,328 | 9,943 | 25.11 |
| FQ4 guide | ~50,000 | ~+342% | ~86% | ~+3,450 | -- | -- | ~31 |
Revenue by business unit (FQ3 FY2026, all records):
Cloud Memory $13,769M ·
Core Data Center $11,524M ·
Mobile & Client $11,521M ·
Auto & Embedded $4,634M.
Data-center (Cloud + Core) reached >$25B (~61% of revenue). Enterprise SSDs hit $5B in the quarter, more than doubling sequentially. Growth is overwhelmingly price/ASP-driven, not volume.
Revenue ($B) -- last 11 quarters + guide
FY23Q3
$3.8B
FY23Q4
$4.0B
FY24Q1
$4.7B
FY24Q2
$5.8B
FY24Q3
$6.8B
FY24Q4
$7.8B
FY25Q1
$8.7B
FY25Q2
$8.1B
FY25Q3
$9.3B
FY25Q4
$11.3B
FY26Q1
$13.6B
FY26Q2
$23.9B
FY26Q3
$41.5B
FQ4 guide
$50.0B
YoY Revenue Growth % -- 8 quarters with YoY available
FY24Q3
+82%
FY24Q4
+93%
FY25Q1
+84%
FY25Q2
+38%
FY25Q3
+37%
FY25Q4
+46%
FY26Q1
+57%
FY26Q2
+196%
FY26Q3
+346%
Growth troughed at +37% (FY25Q3), then re-accelerated: +46% → +57% → +196% → +346%. Five consecutive quarters of acceleration.
Beat / miss -- heatmap (8 quarters, this quarter highlighted)
Measured on non-GAAP EPS and revenue vs Street consensus (FMP). Green = beat, red = miss. MU has beaten EPS in 12/12 of the last 12 quarters (100%); revenue 10/12 (83%), 4/4 over the last 4. Beat magnitude is accelerating -- the Street chronically lags the AI-memory pricing curve.
| Metric | FY24Q4 | FY25Q1 | FY25Q2 | FY25Q3 | FY25Q4 | FY26Q1 | FY26Q2 | FY26Q3 ★ |
|---|---|---|---|---|---|---|---|---|
| EPS | +5.4% | +2.3% | +9.1% | +19.4% | +5.9% | +20.7% | +32.8% | +19.7% |
| Revenue | +1.3% | -0.1% | +2.0% | +4.9% | +0.9% | +5.7% | +19.5% | +15.4% |
| FQ3 FY2026 vs consensus | Consensus | Actual | Variance |
|---|---|---|---|
| Revenue | $35,912M | $41,456M | +$5,544M / +15.4% |
| Non-GAAP EPS | $20.98 | $25.11 | +$4.13 / +19.7% |
| Non-GAAP gross margin | -- | 84.9% | Above high end of guide |
Beat rates: L12Q EPS 12/12 (100%), Revenue 10/12 (83%). L4Q both 4/4 (100%). Last 3 EPS surprises: +20.7%, +32.8%, +19.7% vs low-single-digit beats in FY24/early FY25. Revenue surprise expanded from ~+1-2% to +19.5% and +15.4% in the two most recent quarters. The Street has been chronically slow to model the AI-memory pricing curve.
Revenue actuals cross-checked to Daloopa net sales (exact match). Consensus from FMP Street estimates; Daloopa does not carry sell-side consensus.
Guidance deep dive -- FQ4 FY2026
| Metric | New guide (mid) | Range | Consensus | vs Cons | Implied YoY |
|---|---|---|---|---|---|
| Revenue | $50.0B | $49--51B | ~$42.7B | +17% | ~+342% |
| Gross margin | ~86% | ~85--87% | ~83% | +300bps | ~+3,450bps |
| Non-GAAP EPS | $31.00 | $30--32 | ~$25.4 | +22% | ~+923% |
| Non-GAAP OpEx | $1,650M | $1,650M | -- | -- | -- |
| CapEx | ~$10.0B | ~$10.0B | -- | -- | FY26 total ~$27B |
Revenue waterfall ($B) -- FQ4
Prior anchor (FQ3 guide)
$33.5
FQ3 actual
$41.5
Street consensus
$42.7
New guide LOW
$49.0
New guide MID
$50.0
New guide HIGH
$51.0
Even the low end ($49B) sits ~$6B above Street. FQ3 actual beat FQ3 guide by +24%.
EPS waterfall ($) -- FQ4
Prior anchor (FQ3 guide)
$19.1
FQ3 actual
$25.1
Street consensus
$25.4
New guide LOW
$30.0
New guide MID
$31.0
New guide HIGH
$32.0
MID is +$5.60 above consensus. Three consecutive massive beats suggest guidance remains sandbagged.
Guidance trajectory -- sequential progression
| Qtr reporting | Fwd qtr guided | Rev guide | GM guide | EPS guide |
|---|---|---|---|---|
| FQ2 FY25 | FQ3 FY25 | $10.7B | 42.0% | $2.50 |
| FQ3 FY25 | FQ4 FY25 | $12.5B | 51.5% | $3.75 |
| FQ4 FY25 | FQ1 FY26 | $18.7B | 68.0% | $8.42 |
| FQ1 FY26 | FQ2 FY26 | $33.5B | 81.0% | $19.15 |
| FQ2 FY26 | FQ3 FY26 (actual) | Guide $33.5B; delivered $41.5B (+24%) | 81% → 84.9% | $19.15 → $25.11 |
| FQ3 FY26 | FQ4 FY26 (NEW) | $50.0B | 86.0% | $31.00 |
The margin tell. Sequential gross-margin expansion is flattening -- the bps step ran +1,768 (FQ1) → +1,000 (FQ3) → +110 guided (FQ4). Management explicitly flagged "a meaningful moderation in the rate of price increases." Revenue/EPS guidance stays on the super-cycle trajectory, but margin is approaching a ceiling at unprecedented levels. The guide remains conservative versus the +24%/+31% revenue/EPS beats just delivered.
FY2026 full-year implied: Revenue ~$127B vs ~$113.9B consensus (+11%), EPS ~$73 vs ~$63 consensus (+15%). Both exceed consensus by double-digit percentages -- further evidence of systematic consensus undershoot.
Historical performance -- inflection points (8-quarter trajectory)
| Metric | FY24Q4 | FY25Q1 | FY25Q2 | FY25Q3 | FY25Q4 | FY26Q1 | FY26Q2 | FY26Q3 |
|---|---|---|---|---|---|---|---|---|
| Revenue YoY % | +93.3% | +84.3% | +38.3% | +36.6% | +46.0% | +56.7% | +196.3% | +345.7% |
| Rev accel (bps QoQ) | — | -900 | -4,600 | -170 | +940 | +1,070 | +13,960 | +14,940 |
| EPS YoY % | NM | NM | +271% | +208% | +157% | +167% | +682% | +1,215% |
| EPS accel (bps QoQ) | — | — | NM | -6,330 | -5,130 | +1,020 | +51,510 | +53,260 |
A textbook memory super-cycle in two phases. Phase 1 -- Decelerating recovery (FY24Q4 to FY25Q3): Revenue growth decelerated from +93% to +37% as easy comps burned off and commodity pricing normalized. Even at the trough, growth was solidly positive -- no double-dip. Phase 2 -- Vertical re-acceleration (FY25Q4 to FY26Q3): Five consecutive quarters of accelerating revenue growth, culminating in +346% YoY. EPS amplifies revenue dramatically (+1,215% vs +346%) via operating leverage on a fixed-cost fab base and record 84.9% gross margins. The acceleration itself is accelerating -- Rev Accel went from +940 bps to +14,940 bps QoQ -- the hallmark of a demand shock outstripping capacity.
Marked inflections: (1) FY25Q3 trough -- revenue YoY bottoms at +36.6%, deceleration narrows to -170 bps, signaling exhaustion. (2) FY25Q4 the turn -- first positive acceleration in five quarters (+940 bps). (3) FY26Q2 breakout -- revenue vaults to +196% as HBM/data-center pricing inflects. (4) FY26Q3 peak acceleration -- both growth rates and their acceleration at window highs simultaneously.
The critical forward question: FY2027 will lap the FY2026 blow-out quarters, so YoY rates must mathematically compress. The relevant question shifts from "is it accelerating?" to "how durable is the new revenue level?" Management's $100B take-or-pay backlog and "no line of sight" on when supply catches demand both argue the level is structural, not cyclical.
Data sourced from Daloopa (company_id 136). NM = not meaningful (laps negative prior-year EPS). Acceleration = QoQ change in YoY growth rate, basis points.
Key catalysts
| Tier | Catalyst | Timing | Management signal | Skew |
|---|---|---|---|---|
| 1 | FQ4 guidance execution (~$50B rev) | Aug 2026 | Three consecutive massive beats suggest guidance sandbagged | UPSIDE |
| 1 | HBM4 volume ramp / Vera Rubin | H2 CY2026 | Demand far exceeds supply; HBM4 ramping ~2x faster than HBM3E; >$1B shipped | UPSIDE |
| 1 | SCAs expanding toward 50% rev coverage | Through CY2030 | 16 signed; $22B+ deposits; non-cancelable take-or-pay; ~$100B minimum | UPSIDE |
| 1 | Capital return initiation | Dec 9, 2026 | 100% excess cash via buyback; ~10% annual buyback potential at current FCF | UPSIDE |
| 2 | HBM4E volume ramp | CY2027 | Well underway; customizable base dies on TSMC advanced node | UPSIDE |
| 2 | Structural supply-demand gap | Beyond CY2028 | No intercept visible; supply growth is the binding constraint | UPSIDE |
| 2 | Idaho Fab 1 wafer output | Mid-CY2027 | Construction well underway; greenfield bits contribute CY2028 | NEUTRAL |
| 2 | Enterprise SSD share gains | Ongoing | $5B/qtr; record share 4th consecutive year; QLC + Gen6 leadership | UPSIDE |
| 3 | Agentic AI / robotics demand | CY2026+ | 20-year growth vector; 30-40% CAGR in CPU server demand; not yet modeled | UPSIDE |
| 3 | FY2027 CapEx intensity | FY2027 | Above mid-40% of revenue; majority construction; near-term FCF pressure | MIXED |
| 3 | U.S.-China trade dynamics | Ongoing | CXMT/YMTC contained within China; tariff surcharges imposed; policy wildcard | MIXED |
Catalyst calendar overwhelmingly upside-skewed. The combination of (1) structural supply shortage with no visible intercept, (2) $100B in non-cancelable SCAs, (3) imminent capital return unlock, and (4) a product roadmap aligned with the two highest-growth vectors in semiconductors (HBM for AI training/inference and LPDRAM for agentic AI) creates a multi-year compounding thesis. Primary risk is execution on greenfield capacity and trade policy disruption, not demand destruction.
Sources: MU FQ3 & FQ2 FY2026 earnings call transcripts. SCA/HBM4 dollar figures are transcript-sourced. Fundamental data from Daloopa.
Street Q&A -- 14 questions, 4 deflections
Seven analysts, 14 questions. Management was exceptionally detailed on structural topics (SCA mechanics, HBM demand, competitive positioning) but systematically avoided pinning specific numbers on capital allocation and supply/demand gap metrics -- preserving optionality at the cost of Street modeling precision.
| Analyst | Topic | Verdict |
|---|---|---|
| Reitzes (Melius) | Capital return -- can buyback reach ~10% of market cap? | DEFLECT |
| Reitzes (Melius) | DRAM mix -- appetite to skew toward commodity DRAM? | WELL ANS |
| Sur (JPMorgan) | HBM bookings -- booked through CY2027 on HBM3E/HBM4? | WELL ANS |
| Sur (JPMorgan) | Mid-term DRAM/NAND bit demand CAGR outlook | DEFLECT |
| O'Malley (Barclays) | SCA cancellation provisions and financial hooks | WELL ANS |
| O'Malley (Barclays) | Cash deposit mechanics -- why returned vs. recognized? | WELL ANS |
| Weathers (Deutsche) | SOCAMM / LPDRAM demand trends in data center | WELL ANS |
| Weathers (Deutsche) | Greenfield fab startup cost impact on cost per bit | WELL ANS |
| Rakesh (Mizuho) | Do SCAs include HBM and major CSPs? | WELL ANS |
| Rakesh (Mizuho) | Cash deposit return schedule mechanics | WELL ANS |
| Schneider (Goldman) | What % of forecast demand can MU supply through CY2028? | DEFLECT |
| Schneider (Goldman) | Could FY2027 CapEx reach 55-60% of revenue? | DEFLECT |
| Rakers (Wells Fargo) | NAND strategic advantage within SCA bundling | WELL ANS |
| Rakers (Wells Fargo) | China competition -- CXMT/YMTC evolution | WELL ANS |
Deflection pattern
| Theme | What was asked | What was missing |
|---|---|---|
| Capital return magnitude | Buyback as % of market cap | No quantitative framework for sizing the program |
| Demand growth | Mid-term DRAM/NAND bit demand CAGRs | No numbers; reframed as supply-constrained (true but incomplete) |
| Supply fulfillment | % of demand MU can serve through CY2028 | No aggregate range; segment heterogeneity cited |
| CapEx precision | FY2027 CapEx intensity band | Refused to narrow beyond 'above mid-40%' |
All four deflections involve forward quantitative commitments. Management was exceptionally forthcoming on structural topics but consistently avoided pinning specific numbers on capital allocation and supply/demand gap metrics. This is a deliberate strategy to preserve optionality -- but it leaves the modeling community guessing on four of the most important inputs for FY2027-2028 estimates.
Source: MU FQ3 FY2026 earnings call transcript (2026-06-24).
Contradictions -- 6 identified across transcript series
Contradiction 1 -- HBM TAM $100B timeline: constantly moving target
Severity: Moderate
The $100B milestone migrated from 2030 to 2028 to 2027 across three consecutive earnings cycles (9 months). Each revision was presented as a definitive forecast. While upward revisions are positive, the magnitude of change raises questions about forecasting rigor.
Contradiction 2 -- CEO absent from landmark quarter (HIGH SEVERITY)
Severity: High
Sanjay Mehrotra led every call from FY25Q2 through FY26Q2 with prepared remarks and Q&A. On FQ3 -- the most transformative quarter in company history ($41.5B revenue, 85% GM, $100B SCA backlog) -- the CEO was absent with no explanation. A genuine management red flag per investing principles (C-suite stability, transparency).
Contradiction 3 -- SCA confidentiality reversal
Severity: Moderate
Management categorically refused SCA specifics in FQ1/FQ2 on 'confidentiality' grounds (Mehrotra: 'we are certainly not getting into the specifics'). In FQ3, Sadana disclosed granular mechanics: 16 agreements, $22B deposits, take-or-pay structure, price bands, five-year terms. Either prior over-caution or a deliberate staged reveal -- both affect weighting of management commentary.
Contradiction 4 -- CapEx guidance escalated ~50%
Severity: Moderate
FY2026 CapEx went from ~$18B baseline (implied $4.5B/qtr 'reasonable baseline') to $20B to 'above $25B' to ~$27B in three quarters. Each revision presented matter-of-factly. Undermines individual forecast credibility, though driven by genuine demand.
Contradiction 5 -- Customer fulfillment language shifted
Severity: Low-Moderate
FQ1/FQ2: quantified 50-67% fulfillment rate. FQ3: vaguer 'supply numbers are a fraction of what they want.' Escalation or obfuscation? Either way, the tighter language supports the scarcity narrative without the prior precision.
Contradiction 6 -- Non-HBM margins exceed HBM margins
Severity: Low
FQ2 explicitly acknowledged non-HBM margins exceed HBM -- reframing the bull case from 'HBM as margin engine' to 'supply scarcity across all DRAM as margin engine.' This matters because the entire HBM premium narrative is partially misplaced.
Contradictions 2 (CEO absence) and 3 (SCA disclosure flip) are the most notable from an investing-principles perspective. The CEO's unexplained absence from the most transformative quarter in company history is a genuine management flag. The SCA disclosure reversal suggests either prior over-caution or a deliberate staged reveal -- both affect how investors should weight management commentary on other "confidential" matters. Contradictions 1 and 4 (TAM and CapEx serial revision) are directionally positive but erode the predictive value of any individual forecast.
Source: MU FQ2 through FQ3 FY2026 earnings-call transcripts. No fundamental figures fabricated.
Indirect read-throughs
Macro / sector: MU frames the memory shortage as structural and lasting "beyond calendar 2027" -- a bullish AI-capex super-cycle signal confirming hyperscaler spending intentions remain unbroken. Record DRAM (+low-60s% seq) and NAND (+mid-80s% seq) pricing is inflationary for downstream server/PC/smartphone/auto BOMs. Greenfield fab costs rising industry-wide structurally supports pricing -- cost floors are rising for all producers. 16 non-cancelable SCAs with $22B+ deposits represent a permanent shift in the supplier-customer power dynamic. The biggest indirect read-through is for hyperscale CSPs: their AI ambitions require committing to multi-year, non-cancelable memory contracts at structurally higher prices.
| Company / sector | Read-through | Direction |
|---|---|---|
| Apple (AAPL) | Analyst noted Apple willing to pay full price for DRAM and pass through to customers -- signals broad OEM acceptance of structurally higher memory costs | BETTER |
| NVIDIA (NVDA) | HBM demand driven by GPU/accelerator ramps; HBM TAM pulled to $100B+ in 2027 is a direct positive for GPU attach rates; CPU ambitions validated | BETTER |
| Qualcomm (QCOM) | Validated as real data center CPU contender alongside x86; more CPU suppliers = more DRAM attach, especially LPDRAM/SOCAMM | BETTER |
| Intel/AMD (x86) | Implied via agentic AI driving 30-40% CAGR forecasts for server CPUs; benefits if agentic AI truly drives growth at those rates | BETTER |
| Hyperscale CSPs | Locked into multi-year non-cancelable memory purchases at floor-to-ceiling price bands; memory becoming larger, less flexible cost line | MIXED |
| Samsung / SK Hynix | Same structural tailwinds -- rising ASPs, constrained supply, pricing power for entire oligopoly; MU's SCA model may pressure competitors to adopt similar structures | BETTER |
| CXMT / YMTC (China) | Capabilities growing but sales overwhelmingly within China; no evidence of share theft outside China | NEUTRAL |
| Automotive OEMs | Memory allocation constraints could bottleneck vehicle production, especially ADAS/autonomous; rising memory costs and potential supply shortfalls through CY2028+ | WORSE |
| Fab construction / power infra | Accelerating greenfield build (Idaho, NY, Taiwan, Singapore) means sustained construction and power-equipment spend | BETTER |
| PC / smartphone OEMs | Memory price inflation hits BOMs into soft units; premium-mix OEMs best positioned to pass through | WORSE |
Source: MU FQ3 FY2026 earnings transcript (2026-06-24). Apple comment from analyst (Reitzes, Melius). Peer names illustrative, not MU statements. Data from Daloopa.
Coverage flags: Visible Alpha, Bloomberg, S&P/Kensho, AlphaSense, Snowflake and internal SharePoint/OneNote/Outlook sources were not connected this run -- consensus is FMP-sourced (approximate at the quarterly level); SCA/HBM4 dollar figures and competitor/fab timelines are transcript- or web-sourced and flagged accordingly. No stock price, market cap, or multiple fabricated.
Data sourced from Daloopa.