Micron beats on its fiscal Q4 2026, but capex overshadows the profit

Micron Technology reported its fiscal fourth-quarter results after the market close on September 30, 2026: revenue of $54.2 billion, up 379% from a year ago and above the $51.07 billion consensus estimate. It is confirmation, with audited numbers, of the "memory supercycle" thesis we already covered on this blog four days ago — but the stock's near-flat reaction tells a more nuanced story than the headline record profit suggests.

Context: a date that was already marked on the calendar

On September 27, with Micron (MU) trading around $1,085 after rallying 268% year-to-date, we flagged these September 30 results as "the next concrete date on the calendar" to confirm or deny the thesis of a structural memory shortage driven by AI data center demand. That date has now passed, and the numbers — for the most part — confirm the thesis: demand for DRAM and NAND for AI data centers continues to outstrip available supply, with prices rising double digits quarter over quarter.

What nobody had fully priced in was the scale of Micron's own response in the form of investment: a jump in fiscal 2027 capex that, according to the company itself, will exceed already-elevated fiscal 2026 capex by more than $10 billion. It is that figure, not the record profit, that has dominated the market's reaction.

The concrete, verified data

• Fiscal Q4 2026 revenue: $54.2 billion, +31% sequentially and +379% year over year, above the $51.07 billion consensus (a beat of roughly 5.3%).
• Adjusted earnings per share: $33.42, versus a consensus estimate of $31.16 (a beat of $2.26, roughly 5%).
• Gross margin: 87%, up 210 basis points sequentially.
• Full fiscal year 2026 revenue: $133.2 billion, an all-time company record, up 256% year over year.
• Fiscal Q1 2027 guidance: revenue of approximately $61.5 billion and adjusted EPS of $38.15 — both figures above what consensus expected ahead of the report.

Here is how Micron's quarterly revenue has evolved over the last five quarters, with the company's own guidance for the next quarter added as a sixth data point:

The pace of growth is holding: from $41.2 billion in FQ3 to $54.2 billion in FQ4 (+31% sequentially), and Micron itself is guiding to a further acceleration to $61.5 billion for the current quarter — nothing in these numbers points, for now, to any moderation of the cycle.

By segment: DRAM remains the engine, but NAND is accelerating faster

• DRAM: $39.8 billion, 73% of total revenue, +27% sequentially. Bit shipments rose in the mid-single-digit percentage range, while pricing rose in the high-teens percentage range — supply scarcity, not just higher volume, remains the driver of revenue.
• NAND: $14.1 billion, 26% of revenue, +42% sequentially — a faster growth rate than DRAM this quarter. Bit shipments rose roughly 10%, with prices up roughly 30% sequentially.
• Data center business: $18.0 billion in quarterly revenue, +56% sequentially; within NAND, data center SSD revenue reached nearly $10 billion, more than 10 times the year-ago level and over two-thirds of the company's total NAND revenue.
• HBM (high-bandwidth memory): Micron has already locked in supply agreements for essentially all of its calendar 2027 HBM bit supply, with year-over-year price increases that are narrowing the gross-margin gap between HBM and conventional DRAM — a sign that the higher-value-add business is no longer a niche within the company.

Here is how the segment actually driving the business has accelerated, quarter by quarter:

The jump in DRAM revenue from $18.8 billion in FQ2 to $39.8 billion in FQ4 — more than doubling in two quarters — is the most direct proof that the shortage has not eased at all since we covered it last week; if anything, it has accelerated.

Why the stock barely moved despite the beat: capex overshadows profit

Despite beating consensus on both revenue and profit, and guiding above expectations as well, Micron's stock stayed essentially flat in the session following the report — with moves of only a few tenths of a percentage point, far from the double-digit reactions that have marked other days in this same cycle (recall the +19% on May 26, or the 30% drop after the TurboQuant scare in March). On October 1 the stock was trading around $1,069, essentially in line with the $1,085 level from September 27.

The reason: Micron announced that its capex for the first half of fiscal 2027 will run around $25 billion (about $11.5 billion in the first quarter alone), with the second half of the year expected to come in even higher — putting annualized 2027 capex well above the $27 billion already invested in 2026, a jump of more than $10 billion year over year. The company added that operating expenses will rise by roughly $2.5 billion in fiscal 2027, mainly tied to building new cleanroom capacity.

The market read that figure with caution for a well-known historical reason in this industry: in prior memory cycles, a sharp escalation in capex has tended to precede — with a one-to-two-year lag — a phase of oversupply and margin compression, precisely the pattern we flagged last week when reviewing the 2015-2018 supercycle. Micron's willingness to invest more than $50 billion in a single fiscal year is, at once, proof that the company believes the shortage will persist, and the first concrete ingredient of the next oversupply phase once that investment bears fruit.

By asset: who wins and who loses from this earnings confirmation

Micron and its competitors (SK Hynix, Samsung): confirmation that DRAM and NAND prices keep rising quarter over quarter is directly positive for the sector as a whole — SK Hynix and Samsung report their own results in the coming weeks, and the market will measure them against the bar Micron has just set.

Hyperscalers and server buyers (Microsoft, Google, Meta, Amazon): the fact that HBM supply agreements are already locked in for nearly all of 2027 means these buyers already have committed memory spending for next year at known — and rising — prices, adding further, already-anticipated pressure on the ROI of their AI infrastructure projects.

MU-specific "momentum" investors: the flat reaction despite the beat is the most important signal of the day for anyone already holding the stock — the market has shifted from rewarding every piece of good news (as in May) to also demanding a credible story about the future returns on that capex. That is a regime change in how the stock is being valued, not just a one-off data point.

Semiconductor equipment suppliers (ASML, Applied Materials, Lam Research, Tokyo Electron): capex of more than $50 billion in a single year from one customer alone is directly positive news for this supply chain — a large share of that spending translates into orders for fabrication equipment.

What to watch next

• SK Hynix and Samsung Electronics earnings (coming weeks): will confirm or qualify whether the pricing strength Micron is reporting is an industry-wide phenomenon or specific to its product mix.
• Actual execution of 2027 capex: if the more than $50 billion announced is deployed as planned, meaningful new fabrication capacity won't reach large-scale production until 2027-2028 — until then, scarcity remains the base case.
• Micron's next quarterly report (around December 2026): will be the first real test of whether the $61.5 billion guidance for fiscal Q1 2027 is met, and whether capex keeps scaling at the announced pace.
• Any new AI model compression breakthrough (TurboQuant-style): as we saw in March, a software advance that reduces per-model memory needs remains the main risk to this entire investment thesis that has nothing to do with physical supply.
• The gap between revenue growth and capex growth: if capex starts growing faster than revenue on a sustained basis, it will be the first quantitative signal that the memory market is heading toward the kind of oversupply phase it last saw between 2018 and 2019.

A caveat on the historical parallel we already raised

In our September 27 analysis, we noted that during the 2015-2018 supercycle, Micron's stock peaked while profits still looked unbeatable, anticipating the actual revenue decline by a year or more. The capex escalation the company has announced today is, in a sense, the first concrete data point that fits that pattern: it is not an immediate alarm bell — demand, according to Micron itself, will keep outstripping supply "well into" 2027 and 2028 — but it is exactly the kind of corporate decision that, in prior cycles, has marked the beginning of the end of the scarcity phase, even if it is still one or two years before it shows up in the results.