Prediction: Micron Will Earn More Profit Than Microsoft in Fiscal 2027

According to recent wire material, Micron Technology is projected to generate higher profits than Microsoft in fiscal 2027. Microsoft's fiscal year 2026 was a record-breaking success, with revenue of $331.8 billion and net income of $133.7 billion. Micron, on the other hand, earned $8.5 billion in fiscal year 2025. Analysts believe that Micron is only at the beginning of what could be a significant Act 2 in the AI market, focusing on global rollout rather than early R&D phase.

Micron's guidance for the fourth quarter of 2026 anticipates $30.73 per diluted share in earnings, totaling about $35 billion in profit for the quarter, which is four times the previous year's total. This prediction relies primarily on the price of memory rather than volume. Average selling prices for DRAM increased by 60%, while shipment volumes only rose by a single-digit percentage.

Micron's gross margin increased to 84.6% in the third quarter, indicating that sales are occurring at higher prices despite modest volume growth.

In fiscal 2027, Micron is expected to generate around $141 billion in profit, surpassing Microsoft's $133.7 billion for the same period. Adjusting for the 14-week fiscal quarter, the guidance suggests around $131 billion in profit over a normal 52-week year. Even if Microsoft's profit growth slows to half the previous year's rate, it is still expected to reach around $154 billion.

To achieve this, Micron would need to average about $38 billion to $39 billion in net income per quarter, roughly 10% higher than the guided quarter, with only one fewer week to accomplish it.

While memory prices have soared before, a significant pullback could jeopardize Micron's projected profits. However, Micron has been investing heavily in expanding supply and securing multi-year take-or-pay agreements with customers, which could provide a cushion if prices do decline. Despite potential challenges, Micron is viewed as having a better chance of out-earning Microsoft in fiscal 2027, provided memory prices remain at or near record levels.

However, Micron's higher valuation compared to Microsoft suggests that this scenario would be a modest gain rather than a significant stock rally.