Micron Guided a Single Quarter to $50 Billion. The Stock Sits 24% Below Its High.

Micron Technology reported a record $41.5 billion in revenue for its fiscal third quarter of 2026, marking the highest quarterly revenue in its history. The company's annual revenue for 2025 reached $37.4 billion. The memory specialist saw a significant increase in revenue, generating more in 13 weeks compared to its entire previous year.

Micron guided the fiscal fourth quarter to $50.0 billion in revenue, with a gross margin of around 86%. The earnings guide on a non-GAAP basis is $31.00 per share. Despite strong earnings, the stock price has fallen about 24% below its 52-week high, leading investors to doubt if the earnings can be sustained. The company's revenue has been growing exponentially, from $13.6 billion in Q1 2026 to $41.5 billion in Q3, and gross margins have improved from 57% to 75% to about 85%.

The surge in demand for Micron's products, particularly from the artificial intelligence (AI) data centers, is a major contributor to the revenue growth. Management's expectations were underestimated, with the third quarter revenue guide being more than $7 billion higher than the actual result. The company's supply contracts, which are take-or-pay agreements, are expected to enhance the durability and predictability of Micron's financial performance.

If the company's fiscal fourth quarter hits the midpoint of the guide, the company will close fiscal 2026 with approximately $129 billion in revenue, nearly three and a half times its revenue in 2025. Despite the strong performance, Micron is trading at about 21 times earnings, which is lower than the full-year price-to-earnings ratio.

The author suggests treating the profits as a cyclical peak and considers Micron stock a hold at its current price.