Shares shifted sharply after Micron Technology posted a fiscal third quarter that obliterated every benchmark on the board — then kept climbing. The memory-chip maker reported adjusted earnings of $25.11 per share on revenue of $41.46 billion, versus analyst estimates of $20.49 per share and $35.69 billion in sales.
Micron's stock price is up roughly 700% over the past year, lifting the company's market cap past $1 trillion. The question now: how long can supply-driven pricing power defy the cyclical gravity that has defined this industry for decades?
• Profit Margins That Rival Software Companies, Not Chipmakers. Gross margin jumped to 84.9% in Q3, up from 74.9% last quarter and just 39% a year ago.
Operating income hit $33.7 billion, yielding an 81.2% operating margin — up 54 percentage points year over year. For context, those margins surpass most software giants. The driver is simple: CEO Sanjay Mehrotra disclosed that Micron can fulfill only 50% to two-thirds of customer demand — a structural shortage that lets the company charge premium prices. When demand exceeds supply by that much, pricing power is enormous, but it invites aggressive capacity expansion from rivals.
• Long-Term Contracts Are Designed to Smooth the Boom-Bust Cycle. Micron signed 16 long-term agreements with customers from data centers to automakers, locking in sales for three to five years, with expected financial commitments of $22 billion.
About 40% of revenue is now expected to come from contracts with minimum-price floors built in , a structural shift that, if it holds, would dampen the punishing downturns shareholders have endured historically. Memory has always been brutally cyclical; management is betting it can change that.
• The AI Spending Wave Is Accelerating, Not Plateauing. For Q4, Micron guided revenue of $49–$51 billion, with the $50 billion midpoint topping consensus by $6.55 billion.
Q4 EPS guidance of $30–$32 also came in well above the $25.43 consensus.
Data center sales climbed more than sevenfold year over year to $11.5 billion , underscoring that AI infrastructure spending remains the dominant force in semiconductor markets.
• The Stock's Run Prices In a Lot of Perfection. Shares surged 15.74% on June 25 to $1,213.56 , yet Goldman Sachs acknowledged stronger fundamentals but warned the rally may already reflect much of the good news.
Some analysts caution that coordinated capacity additions from Micron, SK Hynix, and Samsung could eventually normalize pricing.
Micron is increasing fiscal 2026 capital spending to around $27 billion and plans to increase it substantially next year — necessary spending that will eventually bring new supply online and test whether today's extraordinary margins can endure.