Micron revenue nearly triples, but shares fall on spending plan
Micron Technology’s fiscal second-quarter revenue nearly tripled year-on-year and earnings per share rose nearly eightfold, but shares fell after the chipmaker said it would spend over $25 billion on new manufacturing facilities in fiscal 2026, about $5 billion more than prior forecasts.
Shares were down 5.9% at 09:48 ET (13:48 GMT) in early trade on Thursday, News.Az reports, citing Reuters.
The Idaho-based company posted adjusted earnings per share of $12.20 for the quarter ended Feb. 26, against $1.56 a year earlier and above analyst consensus of $8.79. Revenue rose 196% to $23.86 billion from $8.05 billion a year ago, beating estimates of $19.19 billion.
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Gross margin hit 74.9%, up 18 percentage points sequentially and a company record.
"In the AI era, memory has become a strategic asset for our customers, and we are investing in our global manufacturing footprint to support their growing demand," Chief Executive Sanjay Mehrotra said.
DRAM, which accounted for 79% of total revenue, brought in $18.77 billion, up 207% year-on-year.
Bit shipments rose in the mid-single digit percentage range while pricing climbed in the mid-60% range. NAND revenue rose 169% to $5 billion, with pricing up in the high-70% range.
For the current quarter ending May, Micron guided revenue of $33.5 billion, plus or minus $750 million, against analyst estimates of $24.29 billion. Adjusted EPS guidance of $19.15 was nearly double consensus of $12.03. Gross margin is forecast at 81%, up 610 basis points sequentially.
Micron said construction spending will outpace equipment spending in both fiscal 2026 and 2027. Capital expenditure is expected to increase by over $10 billion year-on-year in fiscal 2027 as the company builds out manufacturing sites globally.
Raymond James raised its price target to $530 from $310, citing record revenue across all business units, record margins and record free cash flow, noting that with gross margin guided to 81% in the third quarter, incremental price increases would have a diminished impact on further margin expansion.
Morgan Stanley raised its price target to $520 from $450, maintaining an “overweight” rating, and said it expects adjusted earnings of at least $80 per share to be sustainable through calendar 2027.
Analysts said the post-earnings share decline, after a roughly 100% gain since the prior print, reflected low conviction on the durability of results rather than near-term fundamentals.
Micron signed its first five-year strategic customer agreement with a large, unnamed customer and is in discussions with multiple others. The company announced a 30% increase in its quarterly dividend to $0.15 per share.
Free cash flow of $6.9 billion in the quarter was a company record, surpassing the prior record set in the first fiscal quarter by 77%. Net cash at quarter-end stood at $6.5 billion.
By Faig Mahmudov
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