Micron Crushes Q3 on AI Memory Demand, Guides to $50B Q4 With 86% Margins

Transcript intelligence

What changed

Revenue jumped from $23.9B in Q2 to $41.5B in Q3, a 74% sequential increase, while gross margin expanded from 75% to 84.9%. The company moved from a single five-year SCA to 16 SCAs covering roughly 40% of future revenue. Capital deployment broadened with a multiyear EUV supply agreement with ASML and accelerated fab construction across Idaho, Taiwan, and Singapore. EPS of $25.11 beat consensus by approximately 20%.

Guidance delta

Guidance was raised. Q4 FY2026 outlook projects record revenue of approximately $50B, 86% gross margin, and ~$31 EPS, up from Q3 actuals of $41.5B revenue and 84.9% margin. In the prior quarter, Q3 guidance was $33.5B at roughly 81% margin; actuals exceeded that by a wide margin, coming in at $41.5B and 84.9%.

Key takeaways

• Record Q3 revenue of $41.5B, up 74% sequentially and 346% year-over-year, driven by AI-related DRAM and NAND demand.
• Gross margin reached 84.9%, a new high, with EPS of $25.11 beating consensus by approximately 20%.
• Sixteen strategic customer agreements covering roughly 40% of future revenue with floor-price margins above historic peaks.
• Cash deposits of $22B secured from SCA commitments, providing immediate liquidity and demand visibility.
• Q4 guidance points to approximately $50B revenue, 86% gross margin, and ~$31 EPS.
• Supply constraints for DRAM and NAND expected to persist through and beyond 2027.

Management priorities

• Continue signing and executing SCAs across data-center, automotive, and consumer markets.
• Ramp 1-gamma DRAM and G9 NAND to highest-volume nodes.
• Achieve first wafer output from Idaho ID1 fab by mid-2027 and ID2 by late 2028.
• Complete clean-room expansion at Taiwan Tongluo site and bring Singapore packaging to HBM capacity by H1 2027.
• Increase R&D spend to support next-generation memory technologies including the 1-delta DRAM node.