Published on: 2026-06-16
Micron’s fiscal Q2 2026 revenue was $23.86 billion, a 196% year-over-year increase, with GAAP gross margins rising from 36.8% to 74.4%. DRAM average selling prices increased by about 60% quarter-over-quarter, while bit shipments grew in the mid-single digits. NAND ASPs rose by approximately 70% on minimal volume growth. The gross margin expansion was driven primarily by pricing, not volume.
Fiscal Q3 2026 guidance projects $33.5 billion in revenue at approximately 81% gross margins, surpassing any full-year revenue through FY2024. Q2 free cash flow reached a record $6.9 billion, 77% above the previous high. FY2026 is on pace to generate more free cash flow than all prior best fiscal years combined.
Jensen Huang confirmed on June 5 in Seoul that Samsung, SK Hynix, and Micron are all qualified and in active production for NVIDIA’s Vera Rubin HBM4 platform. According to Bloomberg and TechTimes, SK Hynix holds 60-70% of Vera Rubin’s HBM4 volume, Samsung 25-30%, and Micron the remainder. Micron’s third-place allocation limits the pace of its HBM revenue growth compared to peers.
Micron’s trailing P/E is 51.4x, while the forward P/E based on next-twelve-month analyst consensus is 10.2x, implying projected FY2027 EPS of $103 to $106. FY2027 capex construction costs are expected to increase by over $10 billion from FY2026’s $25 billion base. The key question for June 24 is whether supply tightness will persist into FY2027, supporting gross margins above 80% amid rising capex.
Micron Technology reported fiscal Q2 2026 revenue of $23.86 billion, up 196% year-over-year, with GAAP gross margins of 74.4% and free cash flow of $6.9 billion. A 30% dividend increase was also announced. Q3 guidance projects $33.5 billion in revenue at approximately 81% gross margins, exceeding any previous full fiscal year through FY2024.
The trailing P/E on June 15 stands at 51.4x. The forward P/E on the next twelve-month analyst consensus is 10.2x. Sustaining that spread requires June 24 to confirm supply tightness extending into FY2027 against a capex curve stepping up by over $10 billion and a three-supplier HBM4 race in which Micron holds the smallest allocation at NVIDIA’s Vera Rubin platform.
In fiscal Q2, DRAM average selling prices increased by about 60% quarter-over-quarter, while bit shipments grew in the mid-single digits, according to Micron’s March 2026 10-Q. NAND ASPs rose by approximately 70% with low-single-digit bit shipment growth. DRAM revenue was $18.8 billion, accounting for 79% of total Q2 revenue.
Gross margins increased from 56% in Q1 to 74.4% in Q2, with operating income of $16.5 billion at a 69% margin. Revenue growth was driven almost entirely by higher ASPs, making it vulnerable to contract pricing reversals. The Cloud Memory Business Unit generated $7.75 billion in revenue, up over 160% year-over-year, while data centre NAND revenues more than doubled sequentially.
Sanjay Mehrotra stated that NAND demand is “significantly in excess of our available supply for the foreseeable future” and that both AI and conventional servers face a “lack of adequate DRAM and NAND supply.” Q4 gross margin guidance on June 24 will indicate whether this supply-demand dynamic will persist through the second half of FY2026 or has already peaked.
At GTC Taipei on June 1, 2026, Jensen Huang confirmed that NVIDIA’s Vera Rubin platform is in full production. On June 5 in Seoul, he announced that Samsung, SK Hynix, and Micron have all completed HBM4 qualification and are actively supplying. Vera Rubin features 288 to 384 gigabytes of HBM4 memory per GPU package across eight stacks, delivering approximately 22 terabytes per second of system bandwidth, nearly triple the previous Blackwell generation. Initial shipments to AWS, Google Cloud, Microsoft Azure, and Oracle are scheduled for summer 2026.
Bloomberg and TechTimes report that SK Hynix holds 60-70% of Vera Rubin’s HBM4 volume, Samsung 25-30%, and Micron the remainder. SK Hynix’s share reflects its “One-Team” alliance with TSMC, which provided a first-mover advantage in integrating logic and memory dies at the HBM4 node, and its 62% HBM market share as of mid-2025. Samsung’s HBM4 chips deliver 11.7 Gbps per pin, with mass production beginning in February 2026 and NVIDIA qualification completed ahead of schedule.
Sources: Bloomberg, TechTimes (June 5, 2026), Counterpoint Research (2025), TrendForce (February 2026)
A 10-15% share of a $58 billion HBM market, up from $38 billion in 2025, provides significant revenue at current HBM4 pricing of about $500 per stack. Samsung’s 11.7 Gbps per-pin speed, compared to Micron’s 11.0 Gbps, will be a key factor in supplier allocations for NVIDIA’s Vera Rubin Ultra platform, expected in late 2027, where performance will drive splits more than qualification history. Management’s commentary on HBM4 allocation trajectory on June 24 will provide the forward revenue mix signal the market is seeking.
For traders tracking NVIDIA exposure through EBC, Micron’s HBM4 allocation underscores that the next AI semiconductor move may depend as much on memory supply as on accelerator demand.
Micron projects fiscal 2026 capital expenditures above $25 billion, with Q2 capex at $5.0 billion and Q3 expected at about $7 billion. Q2 generated $6.9 billion in free cash flow from $11.9 billion in operating cash flow. FY2027 construction costs are expected to rise by over $10 billion compared to FY2026, according to Mehrotra’s March 2026 earnings call.
Micron broke ground in January 2026 on the first of four planned fabrication facilities in Clay, New York, with initial wafer output expected around 2028. It is also accelerating construction of a second Idaho fab under a $30 billion commitment, with DRAM production targeted for mid-2027. The $6.4 billion in CHIPS Act direct funding and $5.5 billion in New York state incentives support a $200 billion total US manufacturing program over two decades, targeting approximately 10% of global advanced memory manufacturing by 2035, up from under 2% today. The Idaho facility will be Micron’s first domestic source of advanced DRAM output, reducing a supply chain concentration that has kept advanced memory manufacturing outside the United States for over two decades.
With gross margins of 74% to 81% and quarterly capex of $7 to $9 billion, the company continues to generate strong free cash flow. However, a 15-20 percentage-point margin compression, consistent with past memory-cycle corrections, would significantly reduce free cash flow at the same capex levels. Mehrotra’s preliminary FY2027 capex framework, to be released on June 24, will provide the first public estimate of the construction ramp before pricing visibility is confirmed.
Micron’s trailing P/E stands at 51.4x as of June 15, 2026, while the forward P/E on next-twelve-month analyst consensus is approximately 10.2x per GuruFocus and Finance Charts, implying forecasts of $103 to $106 in fiscal 2027 EPS at the current trading range of $1,051 to $1,097. TD Cowen raised its price target to $1,500 from $660 on June 16; Wolfe Research raised its target to $1,250 from $550 on June 11.
A trailing P/E of 51.4x versus a forward P/E of 10.2x reflects expectations that FY2027 earnings of $103 to $106 per share are achievable, supply tightness persists until then, and the market re-rates from 10x to a mid-cycle multiple as earnings are realised. Memory equities have shown similar profiles at previous cycle peaks; for example, Micron fell from $98 to $48 between October 2021 and October 2022 despite strong consensus DRAM estimates.
AI data centre demand, driven by Vera Rubin shipments to hyperscalers this quarter, distinguishes this cycle from previous consumer-inventory-driven corrections. The key question for June 24 is whether this structural shift can sustain gross margins above 80% through FY2027, despite a capex increase of over $10 billion. A trailing P/E of 51.4x requires a strong structural outlook.
In May 2023, China’s Cyberspace Administration determined that Micron’s products posed network security risks to Chinese critical infrastructure and barred operators of key domestic infrastructure from purchasing them. Micron disclosed at the time that the restriction could affect half of its China-headquartered revenue, equivalent to a “low-double-digit percentage” of total revenues. Micron’s 10-Q filed in March 2026 still lists further actions by the Chinese government as a material risk, and the original administrative determination has not been formally reversed.
Micron’s Cloud Memory Business Unit generated $7.75 billion in Q2 2026, driven by demand from US and Asian hyperscalers. The company continues to operate its Xi’an packaging and assembly facility and maintains commercial relationships outside the critical infrastructure sector. The revenue structure is now less exposed to Chinese infrastructure procurement than when the restriction was first imposed.
YMTC, China’s state-backed DRAM manufacturer, has not closed the process-node gap with Micron’s current 1-alpha and 1-beta DRAM generations, and that gap remains wide in 2026. For investors tracking how US export controls and financial architecture interact with semiconductor companies operating across both markets, EBC’s analysis on the sanctions paradox and dollar dependence dynamics provides the broader structural framing. Read: The US Sanctions Paradox: How Punishing Enemies Is Pushing Allies Away From the Dollar
LSEG analysts had forecasted $20.07 billion in Q3 revenue before Micron’s guidance, but the actual midpoint of $33.5 billion exceeded this by 67%. Micron has delivered a Q3 beat-and-raise for four consecutive quarters. Q4 gross margin guidance, HBM4 allocation commentary, and the preliminary FY2027 capex framework are the key catalysts for stock repricing.
Goldman Sachs analysts noted that the Q2 beat and rising analyst price targets have raised expectations, making the risk-reward profile asymmetric at all-time highs. Q4 gross margin guidance below 78%, Mehrotra indicating Samsung is regaining HBM4 share at NVIDIA, or FY2027 capex guidance above $37 billion without customer commitments, would each diverge from current consensus pricing. The stock is within 2% of its all-time high of $1,089.29 set on June 3, 2026.
For traders following memory and AI semiconductor stocks via EBC, June 24 presents three scenarios. A Q3 beat with Q4 revenue guidance above $35 billion and gross margins above 79% would move MU toward the $1,250 to $1,500 analyst target range. A Q3 beat with Q4 gross margin guidance of 72-75% would prompt the first cycle-top discussion, against a 51.4x trailing multiple. If Mehrotra acknowledges Samsung gaining HBM4 share at NVIDIA, 2027 margins may fall below the current consensus. All three scenarios are currently priced in.
With Q3 revenue guidance of $33.5 billion, projected gross margins of 81%, and $200 billion in planned US manufacturing investment, Micron has achieved an unprecedented scale in its 47-year history. The $6.4 billion in CHIPS Act funding, the mid-2027 start of DRAM production in Idaho, and ongoing New York fab construction ensure a decade of domestic capacity expansion, regardless of near-term pricing cycles.
Q3 results on June 24 are expected to confirm another record quarter. FY2027 guidance on capex and gross margins is critical to maintaining a 51.4x trailing P/E and a market cap nearing $1.25 trillion. The forward P/E of 10.2x, based on projected FY2027 EPS of $103 to $106, is sustainable only if supply tightness, HBM4 pricing, and gross margins remain at current levels as capex increases by over $10 billion annually.
