- Micron Technology delivered another record quarter, but the bigger signal for investors is its growing backlog of long-term customer commitments and expectations for continued memory shortages.
Micron Technology Inc. (NASDAQ: MU) delivered a fiscal fourth-quarter result that exceeded Wall Street expectations, with revenue reaching a record $54.23 billion as demand for memory used in artificial intelligence infrastructure continued to accelerate. The company also issued first-quarter fiscal 2027 guidance well above analyst expectations.
The results extend a remarkable earnings cycle for the memory-chip maker. According to the company's fiscal 2026 earnings release, quarterly revenue increased 379% from $11.32 billion a year earlier, while GAAP net income reached $37.70 billion, or $32.87 per diluted share. Non-GAAP earnings were $33.42 per share.
The numbers come as investors continue to reassess the scale of the AI semiconductor market, where memory has become an increasingly important component of data-center spending. Micron's shares closed Sept. 30 at $1,065.11 and were little changed after the earnings release, according to Yahoo Finance. That muted initial reaction came despite the size of the earnings beat, reflecting the unusually high expectations already embedded in the stock.
Micron's AI Memory Demand Is Extending Into 2027
Micron forecast first-quarter fiscal 2027 revenue of $61.5 billion, plus or minus $1.5 billion, with non-GAAP earnings of $38.15 per share, plus or minus $1. That revenue forecast compares with analyst expectations of about $57 billion, according to Reuters.
The company's gross-margin outlook is also unusually strong. Micron expects first-quarter non-GAAP gross margin of approximately 86.25%, while operating expenses are projected at about $2.06 billion.
Reuters reported that Micron's remaining performance obligations climbed to approximately $150 billion from $100 billion in the previous quarter. Financial commitments under its strategic customer agreements increased to $32 billion from $22 billion, with most of those commitments coming through cash deposits.
Micron now has 26 strategic customer agreements covering more than 35% of estimated revenue through 2030. Some agreements extend into 2031, giving the company greater visibility into future demand than it has historically had in the highly cyclical memory industry.
The company also said memory supply-demand conditions are expected to remain much tighter in calendar 2027 and 2028 than in 2026. Micron expects industry DRAM and NAND markets to remain supply constrained during those years, while HBM demand is expected to grow faster than conventional DRAM through 2028.
That outlook is important because the next phase of AI spending increasingly depends on more than GPUs. AI servers require large quantities of high-performance memory and storage as model sizes, context windows and workloads expand.
Record Profits Come With Much Higher Capital Spending
The other major development is Micron's planned investment cycle. The company expects first-quarter fiscal 2027 capital expenditures of approximately $11.5 billion and first-half fiscal 2027 spending of about $25 billion. Capital expenditures are expected to increase further in the second half of the fiscal year as Micron expands manufacturing capacity.
The spending is aimed largely at additional cleanroom capacity and manufacturing infrastructure for DRAM and HBM. Micron previously said construction-related capital spending would rise significantly as it expanded facilities in the US and overseas.
That creates a central tension in the company's outlook. Strong memory pricing is producing exceptional margins and cash flow, but sustaining that growth requires billions of dollars of investment before additional capacity becomes available.
The latest results show how powerful the current pricing environment has become. Fiscal fourth-quarter DRAM revenue reached $39.8 billion, while NAND revenue was $14.1 billion. DRAM accounted for roughly 73% of total quarterly revenue, according to the company's earnings-call figures.
Morningstar's longer-term analysis has continued to emphasize the cyclical nature of Micron's business. Its research has argued that DRAM and NAND remain highly sensitive to changes in supply, demand, and pricing, even as AI creates a major new source of memory demand.
The market reaction therefore remains closely tied to whether Micron can convert today's exceptional pricing environment into durable earnings while avoiding a future capacity-driven downturn.
The broader market was also watching Micron's report as an important test of AI infrastructure demand. Bloomberg highlighted the stock-market backdrop of rising Treasury yields and shifting investor sentiment around technology shares.
For now, Micron's latest figures provide evidence of continued demand rather than a slowdown. The next test will be whether the company's unusually high margins, customer commitments and supply constraints remain in place as fiscal 2027 progresses.