Micron Technology, Inc. (MU), Financial Analysis

Key conclusions

1. Revenue more than tripled in one year. Q4 FY2026 revenue (14 weeks to 3 Sep 2026) was $54.23bn, up 379% on Q4 FY2025 and 31% on Q3. FY2026 revenue was $133.19bn, up 256% from $37.38bn. Q1 FY2027 guidance is $60.0bn to 63.0bn.
2. Prices drove the growth. In the first nine months of FY2026 DRAM selling prices rose about 140% and NAND prices about 130%, while bit shipments rose about 30% and in the low 20% range (Q3 FY2026 10-Q). GAAP gross margin was 86.8% in Q4 FY2026, against 44.7% a year earlier and a negative 9.1% in FY2023.
3. Customers now sign multi year supply agreements. The agreements are take or pay, with fixed prices or price bands, and include cash deposits. Noncurrent customer contract liabilities were $12.90bn at 3 Sep 2026, against $568m at 28 May 2026. One customer was 17% of FY2025 revenue.
4. Net cash is $68.27bn. FY2026 operating cash flow was $89.68bn and capital spending $30.71bn. Cash and investments were $73.45bn and debt $5.18bn at 3 Sep 2026, after $10.04bn of debt repayments. Buybacks were $650m; CHIPS Act agreements restrict them until Dec 2029.
5. Shares trade at 14.3x FY2026 GAAP EPS of $74.33. At $1,063.96 the P/E is 7.0x annualized Q1 FY2027 guidance ($37.84 a quarter). The price is 8.9x the August 2025 close, 8.7x book value and 8.5x FY2026 revenue on an enterprise value basis.
6. Scenario values for end FY2029 are $298 (worst), $1,043 (base) and $2,494 (best) per share. Current price is 12x base case and 6x best case FY2029 core EPS. In the sensitivity analysis, the exit P/E and FY2029 revenue move value the most.

Views on these results differ. Arguments for a lower valuation cite the price driven nature of growth, the FY2023 loss, new industry capacity from 2027, capital spending of about $27bn net in FY2026 and customer concentration. Arguments for a higher valuation cite supply shortages, multi year agreements with price floors, net cash of $68.27bn and Q1 FY2027 guidance above Q4.

1 Revenue and business model

Micron makes DRAM, NAND and NOR memory chips. It sells through four business units. Cloud Memory serves large cloud customers and sells high bandwidth memory (HBM). Core Data Center serves other data center customers. Mobile and Client serves phones and PCs. Automotive and Embedded serves cars and industry.

• Technology. In FY2025 Micron began shipping its 1 gamma DRAM node, its first with EUV lithography, and began volume production of G9 NAND. HBM4 volume production was planned for calendar 2026 (FY2025 10-K). HBM needs more wafers per bit than standard DRAM.
• Customers. About half of revenue came from the top ten customers in each of the last three years. One customer was 17% of FY2025 revenue and 10% of revenue in the first nine months of FY2026. Cloud Memory and Core Data Center were 61% of FY2026 revenue.
• Capacity. Wafer fabs are in Taiwan, Singapore, Japan and the United States. The 10-K states that Micron generally uses all of its capacity. New fabs are under construction in Idaho, New York and Singapore. Micron bought a fab in Tongluo, Taiwan, from Powerchip for $1.8bn in Mar 2026.
• People and brands. Micron had about 53,000 employees at 28 Aug 2025. It announced the exit from its Crucial consumer business on 3 Dec 2025 (company press release).

2 Financial analysis and ratios

FY2026 revenue rose 256% to $133.19bn while cost of goods sold rose 14% to $25.68bn. Operating income was $99.34bn, against $9.77bn in FY2025, and net income $84.97bn. Revenue exceeded the guidance midpoint in each of the last eight quarters. FY2026 has 53 weeks.

3 MD&A, guidance and management commentary

Micron guided Q1 FY2027 revenue to $61.5bn, plus or minus $1.5bn. It guided gross margin to about 85.95% GAAP and 86.25% non GAAP, and EPS to $37.84 GAAP and $38.15 non GAAP, plus or minus $1.00. Releases guide one quarter ahead. Capital spending plans come from the 10-Q and the call.

• MD&A, FY2025 10-K. Revenue rose 49%. DRAM sales rose 62% on prices up in the low 40% range; NAND sales rose 18%. Gross margin was 40%, against 22% in FY2024.
• MD&A, Q3 FY2026 10-Q. Micron states that AI driven demand for memory and storage is growing faster than industry supply and that it allocates supply among customers. From Q2 to Q3 FY2026 DRAM prices rose in the low 60% range and NAND prices in the mid 80% range. Micron expects gross margin at the floor prices of its customer agreements to be well above its peak quarterly margin in any past cycle.
• Capital spending. The 10-Q guided FY2026 spending to about $27bn net of government incentives; the actual figure was $27.37bn. The call gave about $25bn for H1 FY2027.
• Earnings call, 30 Sep 2026 (summaries of prepared remarks and third party transcripts; no SEC filing). Management expects supply in calendar 2027 and 2028 to be tighter than in 2026. It cited 26 customer agreements covering over 35% of revenue through 2030, with $32bn of customer financial commitments and remaining performance obligations of about $150bn. It expects a tax rate of about 15.5% in FY2027.
• Capital returns (call). Management plans higher returns from 9 Dec 2026 and a further buyback authorization. $2.16bn of the $10bn authorization remained at 28 May 2026.

4 Sector and competitor analysis

Micron's FY2026 revenue growth of 256.3% compares with 175.3% at Sandisk, 95.8% at NVIDIA and 55.0% at Broadcom. Its gross margin of 80.7% compares with 74.7% at NVIDIA and 71.5% at Sandisk. Its capital spending of 23.1% of revenue compares with 21.2% at Intel and under 5% at the other six peers.

• Memory competitors. The FY2025 10-K names Samsung, SK hynix, Kioxia, Sandisk, CXMT and YMTC. Samsung, SK hynix, Kioxia, CXMT and YMTC file no annual reports with the SEC, so Table 4.1 uses storage and chip companies that do.
• Supply. AMD's Q2 2026 10-Q reports an industry wide memory shortage and higher memory prices. Intel's Q2 2026 10-Q expects shortages of memory and other components to last into 2027.
• Storage peers. Sandisk's FY2026 revenue (to 3 Jul 2026) rose 175% to $20.25bn with a 71.5% gross margin. Hard disk drive makers Western Digital and Seagate grew 36% and 34%.
• Customer spending. Microsoft's capital spending rose from $64.6bn to $115.9bn in its year to Jun 2026. Alphabet spent $80.6bn in H1 2026, against $39.6bn in H1 2025 (10-K and 10-Q filings). NVIDIA's Data Center revenue was $277.8bn in the twelve months to 26 Jul 2026.

6 Annual shareholder meeting, ownership and insider activity

Annual shareholder meeting, 15 January 2026

Shareholders elected all eight directors and ratified the auditor. Say on pay received 95.1% support, up from 84.3% in 2025. A shareholder proposal to let holders of 10% of shares call a special meeting received 43.0%. Shares represented were 81.5% of the 1.13bn outstanding.

• Board. Richard Beyer and Mary Pat McCarthy retired at the meeting. Alexis Black Bjorlin joined on 9 Jun 2026, which brings the board to nine. Sanjay Mehrotra is Chairman and CEO and Lynn Dugle is lead independent director. MaryAnn Wright had the lowest support, 96.2%; Sanjay Mehrotra had 96.3%.
• Pay. Sanjay Mehrotra's reported FY2025 pay was $30.9m, of which $25.4m was stock awards. Micron grants no stock options to named executives. CEO pay ratio was 529 to 1 (proxy).

7 Share price and valuation history

EV to sales was 3.6x at the August 2025 close. It is now 8.5x FY2026 revenue and 4.6x annualized Q1 FY2027 guidance of $246.00bn. Market capitalization is $1.20tn on 1.13bn shares, of which net cash is $60 per share. Closing prices over 52 weeks ranged from $181.60 (10 Oct 2025) to $1,213.56 (25 Jun 2026).

Critical factors behind the best case

Core assumptions and demand drivers

• Demand and price. Base case revenue is $246bn in FY2027, then is assumed to fall 10% and 15% as new capacity lowers prices. Best case holds revenue above the Q1 FY2027 run rate. Worst case follows the FY2023 pattern, when revenue fell 49%: revenue falls 35% in FY2028 and 20% in FY2029.
• Margin. The 10-Q states that a significant portion of manufacturing costs is fixed. FY2026 cost of goods sold rose 14% while revenue rose 256%. Base case core margin is assumed to fall from 81% to 60% as prices fall. Worst case reaches 35% in FY2029; FY2022 was 31.6% and FY2023 a negative 35.1%.
• Per share. Base case reduces the share count 1% a year. Buybacks are limited under the CHIPS Act agreements; management plans higher returns from Dec 2026 (call).
• Excluded. Interest on cash built up after FY2026, acquisitions, impairments and legal outcomes. The sum of model EPS for FY2027 to FY2029 is $202, $354 and $506 per share.

9 Sensitivity analysis

10 of the 25 combinations in Figure 9.1 exceed $1,063.96. Values range from $468 at an 8x exit P/E and a 40% margin to $1,847 at 16x and 80%.

Other sensitivities

• Price and volume. A 10% change in FY2026 revenue at unchanged costs equals $13.3bn of operating income, $9.93 of EPS at the FY2026 tax rate (computed).
• Capital spending. FY2026 spending was $30.71bn, 23.1% of revenue. The same amount would be 28% of worst case FY2029 revenue (computed).
• Cash. Net cash of $68.27bn is $60 per share, 5.7% of market capitalization. Customer deposits of $12.90bn are liabilities to be earned through future supply.

Appendix: method, sources and definitions

• Data. Financial statements from XBRL in the 10-K for FY2021 to FY2025 and 10-Q filings for Q1 FY2025 to Q3 FY2026, retrieved through the SEC-API.io MCP server. Q4 FY2026 and FY2026 are from the unaudited earnings release (8-K Ex 99.1 of 30 Sep 2026). Q4 FY2025 equals full year less nine months.
• Other sources. Earnings call of 30 Sep 2026 from summaries of Micron's prepared remarks and of third party transcripts; call figures are in no SEC filing. Peer data from peer filings. Market prices: 5 Oct 2026.
• Definitions. FCF = operating cash flow less expenditures for property, plant and equipment. Core operating income = GAAP operating income before other operating items (restructure, impairments, patent license items); stock compensation stays a cost. Core EPS = company non GAAP net income less stock compensation after tax, over diluted shares. GAAP is close to core.
• Scenario model. EPS = (revenue x core margin plus $2.0bn) x (1 less 15.5%) over diluted shares. Implied value = FY2029 EPS x exit P/E, undiscounted.