Micron’s fourth quarter performance was met with a significant positive market reaction, as its results exceeded Wall Street expectations for both revenue and non-GAAP earnings. Management attributed the quarter’s outperformance mainly to surging demand for advanced memory products across data center, AI, and automotive applications. CEO Sanjay Mehrotra pointed to record results across all business units and highlighted that both DRAM and NAND sales benefitted from tight supply and higher pricing. He explained, “We achieved a number of records in fiscal Q1,” emphasizing that strong execution in a constrained supply environment and increasing AI adoption were central to the quarter’s results.
Is now the time to buy MU? Find out in our full research report (it’s free for active Edge members).
Micron (MU) Q4 CY2025 Highlights:
- Revenue: $13.64 billion vs analyst estimates of $13 billion (56.7% year-on-year growth, 5% beat)
- Adjusted EPS: $4.78 vs analyst estimates of $3.96 (20.7% beat)
- Adjusted EBITDA: $8.63 billion vs analyst estimates of $7.71 billion (63.3% margin, 11.9% beat)
- Revenue Guidance for Q1 CY2026 is $18.7 billion at the midpoint, above analyst estimates of $14.46 billion
- Adjusted EPS guidance for Q1 CY2026 is $8.42 at the midpoint, above analyst estimates of $4.49
- Operating Margin: 45%, up from 25% in the same quarter last year
- Inventory Days Outstanding: 125, up from 121 in the previous quarter
- Market Capitalization: $310.9 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Micron’s Q4 Earnings Call
- Timothy Arcuri (UBS) pressed for specifics about new multiyear customer contracts. CEO Sanjay Mehrotra described them as “very different from prior LTAs” with stronger commitments, but declined to provide further details.
- CJ Muse (Cantor Fitzgerald) questioned the apparent conservatism in capital spending. CFO Mark Murphy explained that supply constraints are due mainly to limited clean room space, and that Micron is “moving quickly” to expand capacity while remaining disciplined with CapEx.
- Harlan Sur (JPMorgan) asked about balancing HBM3E and HBM4 supply given strong AI XPU demand. Mehrotra said the 2026 mix will be managed based on customer requirements but warned that “supply on HBM will be tight” industry-wide.
- Thomas O’Malley (Barclays) inquired about HBM’s share of Micron’s DRAM business and competitive positioning. Mehrotra emphasized the company’s “industry-leading” HBM product performance and power efficiency, noting a focus on managing product mix for both profitability and strategic relationships.
- Vivek Arya (Bank of America Securities) asked about the risk that higher memory prices could impact demand outside data center and AI. Mehrotra acknowledged potential impacts in consumer markets, but said forecasts already account for these effects, with AI-driven content growth a key offset.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be watching (1) how quickly Micron can ramp advanced DRAM and NAND nodes to sustain cost and margin advantages, (2) progress on manufacturing expansions in Idaho, New York, and Asia to relieve supply constraints, and (3) the pace of multiyear contract signings and their impact on visibility and pricing. Execution on new AI-enabled product launches and the ability to meet strong customer demand despite industry tightness will also be critical markers of success.
Micron currently trades at $275.92, up from $226.00 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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