Financial Trends -- 9/10
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 | FY2026 H1 (2 qtrs) |
|---|---|---|---|---|---|---|
| Total Revenue ($M) | $27,705M | $30,758M | $15,540M | $25,111M | $37,378M | $23,860M |
| DRAM Revenue ($M) | $20,039M | $22,386M | $10,978M | $17,603M | $28,578M | $18,768M |
| NAND Revenue ($M) | $7,007M | $7,811M | $4,206M | $7,227M | $8,503M | $4,997M |
| DRAM % of Rev | 72% | 73% | 71% | 70% | 76% | 79% |
| GAAP Gross Margin ($M) | $10,423M | $13,898M | ($1,416M) | $5,613M | $14,873M | $17,755M |
| Gross Margin % | 37.6% | 45.2% | -9.1% | 22.4% | 39.8% | 74.4% |
| Non-GAAP Op Inc ($M) | $7,667M | $10,281M | ($4,819M) | $1,935M | $10,846M | $16,455M |
| Net Income ($M) | $5,861M | $8,687M | ($5,833M) | $778M | $8,539M | $13,785M |
| Non-GAAP EPS | $6.06 | $8.35 | ($4.45) | $1.30 | $8.29 | $12.20 |
| Adj. EBITDA ($M) | $13,973M | $17,426M | $2,927M | $9,656M | $19,126M | $18,685M |
| Adj. FCF ($M) | $2,753M | $3,205M | ($5,453M) | $386M | $3,721M | $6,899M |
| Capex ($M) | ($9,922M) | ($12,067M) | ($7,676M) | ($8,386M) | ($15,857M) | ($6,387M) |
- Dramatic cyclical swing: Revenue fell 49% from FY2022 ($30.8B) to FY2023 ($15.5B), then recovered 62% to FY2024 ($25.1B) and 49% to FY2025 ($37.4B). FY2026 H1 of $23.9B already represents 64% of FY2025 full-year revenue in just two quarters
- Gross margins went from negative to record highs: From -9.1% in FY2023 to 39.8% in FY2025, now 74.4% in FY2026 H1 -- a level unprecedented in memory. FQ3 guidance implies 81%
- DRAM mix shift accelerating: DRAM rose from 70% of revenue in FY2024 to 79% in FQ2 2026, reflecting HBM and AI data center DRAM demand outpacing NAND
- Adj. FCF inflecting sharply: From ($5.5B) in FY2023 to $6.9B in just H1 FY2026, though capex is ramping aggressively (guided above $25B for FY2026)
| Metric | CQ1 2023 (FQ2 2023) | CQ2 2023 (FQ3 2023) | CQ3 2023 (FQ4 2023) | CQ4 2023 (FQ1 2024) | CQ1 2024 (FQ2 2024) | CQ2 2024 (FQ3 2024) | CQ3 2024 (FQ4 2024) | CQ4 2024 (FQ1 2025) | CQ1 2025 (FQ2 2025) | CQ2 2025 (FQ3 2025) | CQ3 2025 (FQ4 2025) | CQ4 2025 (FQ1 2026) | CQ1 2026 (FQ2 2026) |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Non-GAAP EPS | ($1.91) | ($1.43) | ($1.07) | ($0.95) | $0.42 | $0.62 | $1.18 | $1.79 | $1.56 | $1.91 | $3.03 | $4.78 | $12.20 |
| DRAM Revenue ($M) | $2,722M | $2,672M | $2,755M | $3,427M | $4,158M | $4,692M | $5,326M | $6,400M | $6,123M | $7,071M | $8,984M | $10,812M | $18,768M |
| NAND Revenue ($M) | $885M | $1,013M | $1,205M | $1,230M | $1,567M | $2,065M | $2,365M | $2,241M | $1,855M | $2,155M | $2,252M | $2,743M | $4,997M |
| Adj. EBITDA ($M) | ($124M) | $478M | $737M | $922M | $2,119M | $2,895M | $3,720M | $4,411M | $4,080M | $4,569M | $6,066M | $8,604M | $18,685M |
- EPS inflection is extraordinary: From ($1.91) in CQ1 2023 to $12.20 in CQ1 2026 -- a $14.11 swing over 13 quarters. The CQ1 2026 quarter alone ($12.20) exceeds the entire FY2025 annual EPS ($8.29)
- DRAM revenue nearly 7x from trough: $2,672M in CQ2 2023 to $18,768M in CQ1 2026, driven by HBM ramp and pricing power
- NAND also inflecting: From ~$1B/quarter in the trough to $5.0B in CQ1 2026, with data center SSD revenue more than doubling sequentially in FQ2 2026
- EBITDA went from ($124M) to $18,685M: A 150x improvement from the CQ1 2023 trough to CQ1 2026, reflecting extreme operating leverage in memory at cycle peaks
- Data center segments (CMBU + CDBU) combined for $13.4B in FQ2 2026 -- 56% of total revenue, up from ~$6.1B the prior year, reflecting AI-driven demand
- CDBU (Core Data Center) more than doubled from FQ1 to FQ2 ($2.4B to $5.7B), the fastest-growing segment driven by enterprise AI adoption
- MCBU (Mobile and Client) nearly doubled to $7.7B with the highest gross margin at 79%, reflecting strong PC/mobile AI demand
- AEBU (Auto and Embedded) grew 57% QoQ to $2.7B, though at lower margins (68%) -- the smallest but steadily growing segment
- DRAM share rose from 70% to 79% over the past two fiscal years, driven by HBM and AI data center demand creating outsized DRAM growth
- NAND share declined from 29% to 21%, though absolute NAND revenue is growing -- it is simply outpaced by DRAM. Data center SSD demand is accelerating and could narrow the gap
- United States dominates at 64% ($24.1B), reflecting US hyperscaler and data center customer concentration
- Taiwan at 15% ($5.7B) captures packaging and foundry-adjacent demand (TSMC ecosystem)
- Mainland China + Hong Kong at ~10% ($3.8B combined) -- export restrictions limit advanced product sales, creating a revenue ceiling in China
| Metric | FY2026E (Street) | FY2027E (Street) |
|---|---|---|
| Revenue | ~$76B | ~$100B+ |
| Non-GAAP EPS | ~$35 | ~$48 |
| Avg. Price Target | ~$530 (range $400-$700) | -- |
| Analyst Rating | Strong Buy / Buy (28-29 analysts) | -- |
- FY2026E consensus of ~$76B revenue and ~$35 EPS implies a full-year P/E of ~10.5x at the current $366 price -- optically cheap but reflects peak-cycle earnings
- FY2027E consensus of ~$100B+ revenue and ~$48 EPS implies continued growth, though at a decelerating rate as the market models supply normalization
- Avg. price target of ~$530 implies ~45% upside from $366, with a wide range ($400-$700) reflecting divergent views on cycle duration
- Stock at $366 vs 52-week range of $61.54-$471.34 -- well off highs despite record results, indicating market skepticism on sustainability
This is one of the most dramatic earnings inflections in semiconductor history. Revenue nearly tripled YoY in FQ2 2026 ($23.9B vs $8.1B a year ago). Gross margins expanded from ~38% in FQ2 2025 to 75% in FQ2 2026, with guidance for 81% in FQ3 -- a level unprecedented in memory. Non-GAAP EPS of $12.20 in a single quarter exceeded the entire FY2025 annual EPS of $8.29. Adjusted FCF of $6.9B in H1 FY2026 already exceeds any full-year total in company history.
The quarterly data reveals the sheer magnitude of the inflection: EPS swung from ($1.91) in CQ1 2023 to $12.20 in CQ1 2026, a $14.11 improvement over 13 quarters. DRAM revenue went from ~$2.7B to $18.8B per quarter (7x). Adj. EBITDA went from ($124M) to $18.7B (150x). NAND is also inflecting, with data center SSD revenue more than doubling sequentially.
The key question is sustainability. Management insists supply-demand tightness persists "beyond calendar 2026," supported by HBM trade ratios constraining DRAM bit supply, 3+ year fab lead times, and the introduction of 5-year Strategic Customer Agreements. However, memory has historically been prone to sharp reversals -- from FY2022 peak ($8.35 EPS) to FY2023 trough ($-4.45 EPS) was a 152% swing. Capex is ramping aggressively (guided above $25B for FY2026, stepping up meaningfully in FY2027), which could become a drag if demand slows.
No penalty modifiers applied: FCF is strongly positive and accelerating, operating income is at record levels, margins are expanding, and there are no dilution concerns.
Score: 9/10 -- The most dramatic financial inflection in memory history. Revenue tripling, margins at unprecedented levels, record FCF, and FQ3 guide implying an $88B annualized run-rate. Held below 10 by inherent cyclicality risk and the aggressive capex trajectory.