Micron Technology shares MU rose 0.49% in trading on Wednesday as investors prepared for the memory-chip maker’s fiscal fourth-quarter results after the market close.
The results are expected to show another sharp increase in revenue and earnings, but investors are likely to focus on Micron’s outlook for fiscal 2027 and whether strong artificial intelligence demand can sustain elevated memory prices and margins.
Micron earnings expected to show strong growth
Analysts expect Micron to report fiscal fourth-quarter earnings of $31.61 per share on revenue of $51.07 billion, according to LSEG estimates.
Bloomberg’s average estimates put fiscal fourth-quarter net income at $36 billion on sales of $51.5 billion. That would represent increases of more than 1,000% and 350%, respectively, from a year earlier.
Gross margin is expected to reach 86%, compared with 46% in the fourth quarter of fiscal 2025.
Micron previously guided for an adjusted gross margin of about 86%, which would be a company record.
The company’s strong profitability reflects rising memory prices as demand from AI infrastructure has increased while supply remains constrained.
Micron has also been expanding its high-bandwidth memory business. The company is already shipping HBM4 and expects HBM4E to enter volume production in calendar 2027.
AI demand and memory margins in focus
The main question for investors is whether Micron can maintain its current pricing power and profitability as additional memory capacity comes online.
The company has benefited from strong spending on AI infrastructure, which has absorbed memory supply and supported higher prices.
Utkarsh Ahuja, founder and managing partner at Moon Pursuit Capital, told Invezz that the focus should extend beyond Micron’s quarterly results to how management discusses HBM demand, pricing and gross margins for 2027.
“Expectations for Micron are already incredibly high, so a strong quarter on its own probably won’t tell investors very much,” Ahuja said. He noted that AI infrastructure spending has driven strong demand for HBM and advanced DRAM, while supply constraints have allowed Micron to increase pricing and margins.
Ahuja said the company’s commentary on 2027 could provide a clearer indication of how much room remains in the current cycle.
Ravi Tanuku, CEO of NTAQ SPAC, told Invezz that the broader AI infrastructure outlook is increasingly tied to the availability of power needed to support new data-center capacity.
“The AI infrastructure debate is increasingly becoming a power debate,” Tanuku said, pointing to questions over whether generation, interconnects and transmission can expand quickly enough to support planned data-center growth.
He said this could have implications for semiconductor demand, as the outlook for chips increasingly depends on the pace of actual power deployment.
For Micron specifically, Tanuku said he will be watching forward customer commitments, particularly whether customers are willing to lock in HBM volumes and pricing several years ahead.
He said longer-term commitments could indicate confidence in both AI demand and the ability to bring the underlying computing and power infrastructure online.
Conversely, shorter commitments or delayed deployments could signal that power availability, rather than demand, is becoming a constraint.
He also highlighted the potential impact of new memory capacity coming online across the industry.
Micron and other memory manufacturers are investing billions of dollars to expand capacity, which could eventually increase supply and put pressure on pricing and margins.
However, Ahuja said the traditional memory cycle could play out differently if AI workloads continue to absorb new capacity.
“If demand continues absorbing new capacity as quickly as it comes online, these economics can hold for longer than investors might expect from a traditional memory cycle,” he said. “If supply starts catching up, Micron can still grow very strongly while pricing and margins begin to come back down.”
However, the stock remains 12% below its June 25 peak.
The memory industry’s historical boom-and-bust cycles remain a consideration for investors.
Micron currently trades at about seven times expected earnings over the next 12 months, compared with roughly 10 times over the past two years and 19 times for the S&P 500.
Strategic agreements and fiscal 2027 outlook
Micron’s strategic customer agreements are another area investors are expected to monitor.
The agreements cover DRAM, including HBM where applicable, as well as NAND, with binding commitments for specified volumes over multiple years.
Some agreements also include price floors and ceilings.
Micron had disclosed 16 strategic customer agreements as of its June earnings report and later announced deals with General Motors, Ford and several major automotive suppliers.
The company expects roughly half or more of its revenue to eventually fall under these agreements.
Investors will also be looking for guidance on HBM, DRAM and NAND demand, supply growth and pricing for fiscal 2027.
Bloomberg estimates that revenue growth could slow to 96% in fiscal 2027 from 247% in fiscal 2026, before slowing further to 12% in fiscal 2028.
That outlook leaves the durability of Micron’s current earnings as a key issue for investors.
Strong AI demand and constrained supply could support pricing, while faster supply growth could put pressure on margins and reinforce concerns about the cyclical nature of the memory market.
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