$MU Posts Record Q4 Earnings and Warns Memory Deficit Will Worsen Through Fiscal 2028

Micron Technology ($MU) reported record fiscal fourth-quarter results, beating Wall Street estimates across top- and bottom-line metrics while warning that structural memory chip shortages will tighten further through fiscal 2027 and 2028.
For Q4, revenue surged 379% year-over-year to $54.23 billion, adjusted EPS reached $33.42 versus $31.61 expected, and gross margin hit 87%. For the full fiscal year, revenue rose 256% to $133.19 billion. Management guided Q1 revenue between $60 billion and $63 billion with adjusted EPS of $37.15 to $39.15.
Key operational and market developments include:
• Prolonged Supply Shortages: CEO Sanjay Mehrotra confirmed demand continues to accelerate, with supply and demand imbalances projected to be significantly tighter over the next two fiscal years and no near-term visibility on balance.
• Heavy CapEx Expansion: Micron anticipates $11.5 billion in current-quarter capital expenditure and roughly $25 billion across the first half of fiscal 2027 to expand facilities across Idaho, New York, Taiwan, Singapore, and Japan. Full-year FY27 CapEx is projected to exceed $50 billion.
• Long-Term Customer Lock-In: To dampen traditional memory cyclicality, Micron expanded its strategic customer agreements to 26 contracts worth $32 billion, extending through 2031. Over 75% of fiscal 2027 output is already committed.
• Downstream Consumer Inflation: Surging DRAM and HBM costs continue to pressure hardware OEMs. TechInsights estimates the DRAM component cost in the iPhone 18 Pro climbed to approximately $145, up from $39 in the iPhone 17 Pro, contributing to recent retail price increases across consumer electronics.