AI memory demand continues to surge: Micron (MU.US) surpasses expectations in Q4, with quarterly data center core business revenue increasing by over 10 times year-over-year

According to Zhitong Finance APP, storage chip giant Micron Technology (MU.US) released its Q4 FY 2026 results after market close on Wednesday, with both revenue and profit surpassing Wall Street expectations, and provided guidance for the next quarter that was stronger than market forecasts. As global AI infrastructure construction continues to boost demand for High Bandwidth Memory (HBM), DRAM, and data center storage, Micron expects its performance in FY 2027 to further strengthen.

Micron's fourth-quarter revenue reached $54.23 billion, higher than $41.46 billion in the previous quarter and far above $11.32 billion in the same period last year; non-GAAP diluted earnings per share reached $33.42, compared to just $3.03 a year ago. According to consensus estimates, Wall Street expected Micron’s quarterly revenue to be $51.49 billion, with EPS at $31.83.

On a GAAP basis, Micron’s net profit for the quarter reached $37.7 billion, with diluted earnings per share at $32.87; non-GAAP net profit was $38.4 billion. Adjusted gross margin rose to 87%, up from 84.9% in the previous quarter and significantly higher than 45.7% a year ago.

Micron Chairman and CEO Sanjay Mehrotra stated that the company achieved record-breaking results in FY 2026 and expects even stronger performance in FY 2027. The company is increasing investments in technology, products, and manufacturing capabilities to meet growing customer demand.

Next Quarter Revenue Guidance Up to $63 Billion, Again Surpassing Market Expectations

More notable than the Q4 results was Micron's latest performance outlook. Micron expects first-quarter FY 2027 revenue to be $61.5 billion, fluctuating +/-$1.5 billion, that is, between $60 and $63 billion; non-GAAP diluted EPS is forecast at $38.15, fluctuating +/-$1; adjusted gross margin is expected to be around 86.25%.

This guidance is significantly higher than market expectations. Citing analyst data, media reported the market previously expected Micron’s first fiscal quarter revenue to be around $57.02 billion, with adjusted EPS of about $35.40. This means that, even after rapid growth in FY 2026, Micron expects AI-driven demand for storage chips to continue into the new fiscal year.

Data Center Business Explodes, Core Business Quarterly Revenue Grows Over 10 Times Year-on-Year

AI data centers have become the core driver of Micron’s performance growth. In the fourth quarter, Micron’s Cloud Memory Business Unit revenue reached $16.28 billion, up from $13.77 billion in the previous quarter and $4.54 billion a year earlier.

The growth was even more pronounced in its Core Data Center Business Unit, with Q4 revenue reaching $18 billion, up from $11.52 billion in the prior quarter and just $1.58 billion a year ago, representing a more than tenfold increase within one year. This business unit's gross margin reached 90%, and operating profit margin hit 85%.

With leading technology companies worldwide massively building AI data centers, demand for DRAM, HBM, and high-speed flash memory continues to rise. HBM is a key component in AI accelerators made by Nvidia, while large AI servers and data centers require vast amounts of high-speed storage products—two markets Micron serves simultaneously.

Media reported that Micron’s AI-related memory product orders have already far exceeded existing production capacity. Major tech firms, including Amazon and Alphabet, are continuing large-scale investments in AI infrastructure this year, providing sustained demand for HBM and other high-performance storage products.

FY 2026 Revenue Exceeds $130 Billion, Net Profit Soars Year-on-Year

From a full-year perspective, Micron’s FY 2026 growth was even more prominent. Annual revenue reached $133.19 billion, an over twofold increase from FY 2025’s $37.38 billion; GAAP net profit hit $84.97 billion, compared to $8.54 billion in the prior year.

Non-GAAP net profit reached $86.76 billion, with diluted EPS at $75.52, a dramatic increase from $8.29 in the prior year. Full-year operating cash flow reached $89.68 billion, much higher than last year’s $17.53 billion.

Net capital expenditure for Q4 was $10.77 billion and $27.37 billion for the full year; adjusted free cash flow for Q4 reached $3.32 billion, with the full year hitting $6.231 billion. As of fiscal year-end, cash, marketable investments, and restricted cash totaled $73.48 billion.

Investing in Next-Generation Storage Products, Betting on Long-Term AI Demand

Facing continued growth in AI compute demand, Micron is further increasing its investment in technology and manufacturing.

The company stated that revenue from its server LPDDR SOCAMM product portfolio more than doubled sequentially in the fourth quarter, and it has already sent samples of the industry’s first 512GB ultra-high-capacity DDR5 RDIMM, supporting data transfer rates up to 9200 MT/s.

Additionally, Micron’s high-speed server RDIMM based on 1-gamma process technology has completed qualification with multiple customers, while the 7600 PCIe Gen 5 and 9650 PCIe Gen 6 SSDs have been shipped to key customers for AI applications such as KV-cache. The company mentioned that its AI workstation products have now been designed into all Tier-1 OEM customers.

In August this year, Micron announced it would invest up to $10 billion in building Micron Research Labs in Boise, Idaho, over the coming decade, betting on next-generation storage and AI technology R&D.

The AI boom is also driving the entire storage chip industry into a prosperous cycle. In addition to Micron, Samsung Electronics and SK hynix are also benefiting from rapidly growing HBM and DRAM demand. However, soaring memory prices have started to ripple into the consumer electronics sector, pressuring smartphone, PC, and other manufacturers with higher component costs.

Share Price Soars About 550% in One Year, Market Focused on AI Memory Boom Sustainability

Driven by exploding AI memory demand, Micron’s stock price has risen about 275% so far this year and about 550% over the past 12 months, making it one of the top-performing semiconductor stocks in the AI infrastructure boom.

After the strong results, Micron's stock price edged up slightly in after-hours trading. Latest after-hours data show Micron at about $1071.92, up about 0.6% from its regular session close.

Although there has recently been more discussion about the scale of AI investments, the development of cutting-edge AI models, and the sustainability of massive data center capital spending, Micron’s latest results indicate that at least on the storage chip front, AI infrastructure demand remains robust for now.

In Q4, the company’s revenue grew nearly fourfold year-on-year, data center business expanded rapidly, and guidance for the next quarter once again outpaced market expectations. As demand for HBM, server DRAM, and high-speed data center SSDs continues to rise, whether the current intensity of AI infrastructure investment can be maintained, and whether Micron can sustain high gross margins while expanding capacity, will become the next key focus for investors.