TLDR
- Micron reported Q4 adjusted EPS of $3.03, beating analyst estimates of $2.86 by 6%
- Revenue reached $11.3 billion, surpassing forecasts and jumping 46% year-over-year
- AI data center segment now represents 40% of total revenue, up from 19% last year
- Stock gained 1.7% in after-hours trading following the strong earnings report
- Q1 guidance exceeded expectations with revenue projected between $12.2-12.8 billion
Micron Technology delivered another earnings beat Tuesday, proving that artificial intelligence demand continues driving the memory chipmaker’s financial performance. The company’s stock rose in after-hours trading after results topped Wall Street expectations.
The Idaho-based memory manufacturer reported fourth-quarter adjusted earnings of $3.03 per share. This beat analyst estimates of $2.86 and represented a massive jump from $1.18 per share in the same period last year.
Revenue hit $11.3 billion for the quarter ending August 28. The figure exceeded expectations of $11.2 billion while marking a 46% increase from the previous year. This performance set another quarterly revenue record for Micron.
AI Data Centers Transform Revenue Mix
The standout performer was Micron’s high-end memory products designed for AI applications. Revenue from this segment reached 40% of total company sales, up dramatically from just 19% in the year-ago quarter.
CEO Sanjay Mehrotra expressed confidence in the company’s position during the earnings call. “We have strong momentum entering fiscal 2026, with a robust fiscal Q1 demand outlook led by data center,” he stated.
The executive painted an optimistic picture for long-term growth opportunities. “Over the coming years, we expect trillions of dollars to be invested in AI, and a large portion will be spent on memory,” Mehrotra explained.
This AI-driven cycle has already lasted two years, matching the typical length of memory industry cycles. However, demand shows no signs of weakening as companies continue building AI infrastructure.
DRAM memory chips led the revenue beat with nearly 70% growth to $8.98 billion. These dynamic random access memory products handle short-term storage in data centers and personal computers.
Strong Guidance Points to Continued Growth
Micron provided robust first-quarter guidance that exceeded analyst projections. The company expects revenue between $12.2 billion and $12.8 billion, well above the $11.9 billion analyst forecast.
Adjusted earnings per share should land between $3.60 and $3.90 for the first quarter. This range also topped analyst expectations of $3.05 per share.
The positive outlook reflects sustained demand for high-bandwidth memory products. These specialized chips stack multiple DRAM components vertically and work alongside graphics processors in AI systems.
TD Cowen analyst Krish Sankar raised his price target to $180 from $150 following the results. He noted that memory prices should continue rising in upcoming quarters, defying typical cycle patterns.
Ten analysts have increased their price targets in the past week alone. The average target now stands at $166.44, with shares trading at $164.62 after gaining 38% in September.
NAND storage chips faced some headwinds with revenue falling 5% to $2.25 billion. However, management expects this segment to strengthen as AI applications require more long-term storage capacity.
Chief business officer Sumit Sadana noted improving NAND fundamentals. “We are starting to see increased level of purchases from data center customers of NAND as well,” he explained during the call.
