Micron Technology handed over its strongest quarterly report so far this fiscal year. The three core indicators of revenue, profit and gross profit margin significantly exceeded market expectations in an all-round way, and gave guidance for the next quarter that was significantly higher than the consensus, which pushed the expectation of the prosperity of the storage industry to further upward.
After the financial report was announced,Wall Street institutions immediately set off an intensive wave of price target increases。 BofA Securities raises price target to $1,550 from $1,500, maintains a "buy" rating; Investment bank Baird raised its price target sharply from $500 to $1,280; DA Davidson, a financial institution, also raised it to $2,000 (the highest price target on Wall Street) and maintained its "buy" rating; Goldman Sachs also raised its price target to $1,100 from $900, maintaining a "neutral" rating.
Goldman Sachs further pointed out that under the background of continuous rising prices of DRAM and NAND, this quarter's financial report verifies that the storage industry is still in an accelerating upward cycle. Follow-up focus of the market will be on management's further guidance on the progress of 16 strategic customer agreements, capital expenditure planning for FY2027, and changes in traditional storage demand structure.
Performance exceeded expectations across the board, with NAND performing the most outstanding
In the fiscal third quarter ended May 2026, Micron's three core indicators were significantly better than market expectations across the board.
The company achieved revenue of $41.456 billion, a significant year-over-year increase and about 14% above the Wall Street consensus estimate. In terms of business, DRAM revenue was USD 31.328 billion, which was about 11% higher than the market expectation as a whole;NAND's revenue of $9.943 billion was approximately 27.9% higher than expected, making it the largest source of beats in the quarter.
Driven by the two-wheel drive of price and shipment, DA Davidson pointed out that NAND bit shipments increased by mid-single digits month-on-month, while the average selling price increased by "80% lower range" month-on-month; The month-on-month increase of the average selling price of DRAM also reached "60% lower range", indicating that the upward trend of storage prices has significantly strengthened.
The earnings side also greatly exceeded expectations. Non-GAAP EPS of $25.11 beat market estimates by about 19%; The gross profit margin was 84.9%, approximately 240 basis points above the consensus level. Citing FactSet data, Citi pointed out (including equity incentive caliber),Revenue, gross profit margin and EPS are also significantly ahead of market consensus expectations across the board。
Next Quarter Guidance Revised Upward Again, Demand Strengthens in Sync with Pricing
Micron's guidance for the fiscal fourth quarter further strengthens the upward trend of the industry.
The company expects a revenue range of $49 billion to $51 billion, with a median value of $50 billion, which is about 14% higher than the market consensus and corresponds to a quarter-over-quarter increase of about 20%. Gross margin guidance rose to 86%, continuing to exceed market expectations by approximately more than 100 basis points. Non-GAAP EPS guidance is $30 to $32, with a median value of $31, which is also significantly higher than the market consensus expectation of about 20%.
Citi data shows that the guidance is significantly higher than its own estimate (revenue of $42 billion, gross margin of 82%, EPS of $24.27) and also significantly ahead of the FactSet consensus estimate.Goldman Sachs pointed out that, more importantly, this guidance did not show the convergence of more than expected magnitude, which means that the upward cycle of storage prices is still continuing.
Strategic customer agreements lock in long-term demand and accelerate capital expenditure simultaneously
On the demand side, Micron signed 16 strategic long-term agreements with customers in the data center, consumer electronics and automotive sectors during the quarter, with an average term of approximately five years, covering approximately 20% of DRAM shipments and one-third of NAND shipments.
Most of these agreements adopt a "take-or-pay" structure, and set an upper and lower price limit mechanism on the basis of the current market price. The company disclosed that the lowest price clause of the relevant agreement corresponds to a total of approximately US$100 billion in potential revenue, and it expects to receive approximately US$22 billion in cash advances to support supply chain expansion.
In the meantime,The company expects capital expenditure to reach US$10 billion in the fourth fiscal quarter for new capacity construction, and emphasizes that the tight supply and demand pattern of storage will continue until at least 2027.
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