Micron Technology
Micron Technology · Semiconductors (Memory)
01Wall Street Consensus
02Company Guidance
03Earnings Results
Key Takeaways
- EPS $9.03 — +3.9% surprise vs consensus $8.69, below whisper $9.19 but solid beat
- Revenue $19.8B (+145% YoY) — HBM revenue $5.2B, 4x YoY growth, 26% of total revenue
- Gross Margin 69.1% — beat guidance of 68%, driven by HBM mix improvement
- Q3 guidance raises revenue to $20.5B and GM to 69.5% — weakens 'peak earnings' narrative
- HBM4 high-yield ramp CQ2 2026 on track — Sanjay Mehrotra: 'yields meeting internal targets'
- Tariff: 'potential tariffs not reflected in guidance' maintained, but emphasized natural hedge through expanding US production
Key Checkpoints
- 01Q3 FY2026 Gross Margin guidance — whether 68% is maintained is key
- 02HBM4 high-yield ramp progress (targeting CQ2 2026)
- 03Full 2026 HBM price and volume contracts completed (confirmed)
- 04Q3 Revenue guidance vs market expectation of $20-21B
- 05Whether tariff impact is reflected in guidance (currently explicitly excluded)
- 06FY2026 CapEx $20B guidance change status
Upside Catalysts
- Q3 guidance Revenue $21B+, GM >69% would open annual EPS $38-42 path
- HBM4 high-yield CQ2 confirmation strengthens supply mix improvement conviction
- Tariff impact minimization or US government exemption signal
- FY2026 full-year FCF guidance raise could drive buyback expansion
- PSMC Tongluo P5 site acquisition completion expands long-term HBM supply capability
- Only US memory maker geopolitical premium + CHIPS Act $6.4B benefit
Risk Factors
- Tariff/geopolitical risk: Section 232 semiconductor tariff of 25% effective (1/15/2026). China security threat precedent from 2023. Explicitly excluded from guidance
- Supply overshoot: MU + SK Hynix + Samsung simultaneous HBM capacity expansion could reverse supply-demand balance in 2027H2
- HBM4 yield risk: delayed high-yield ramp could miss 2026H2 revenue/margin guidance
- Stock already priced in: YTD +34-49%, +21.6% in past 2 weeks, market cap first crossed $500B. Options market pricing +-9.94% swing
- Peak earnings debate: Forward P/E ~13.5x at collision point between 'structural transformation' vs 'peak earnings' narratives
EEPS History (Last 13 Quarters)
Actual EPS vs Consensus — Green Beat · Red Miss
1Earnings Summary
Micron posted EPS of $9.03 (consensus $8.69, +3.9% surprise) and Revenue of $19.8B (+145% YoY, +7.5% QoQ) in Q2 FY2026, exceeding market expectations.
HBM Revenue reached $5.2B, growing approximately 4x YoY to account for 26% of total revenue, while DRAM segment revenue also surged to $15.1B (+165% YoY) driven by AI server demand.
Gross Margin came in at 69.1%, beating the company's guidance of 68%, with HBM and high-value server DRAM mix improvement being the key margin drivers.
2Q3 FY2026 Guidance — Exceeding Market Expectations
Management provided Q3 FY2026 guidance as follows:
- Revenue: $20.5B +/- $0.5B (above consensus $20.0B)
- Gross Margin: 69.5% +/- 1.5% (above consensus 68%)
- EPS: $9.50 +/- $0.25
Notably, the Gross Margin guidance of 69.5% sent a strong positive signal to the market, as CFO Mark Murphy stated that margins should 'approach 70% beyond Q3.' Raising revenue guidance while maintaining FY2026 annual CapEx guidance at $20B implies improving FCF leverage.
3HBM Supercycle — Structural Expansion Confirmed
The core takeaway from these results is the reconfirmation that HBM is a structural growth story, not a temporary boom.
- HBM Revenue $5.2B — QoQ +18%, YoY ~+400%
- Full 2026 HBM price and volume contracts completed (reconfirmed)
- HBM4 high-yield ramp CQ2 2026 on track
- HBM TAM outlook: $45B+ in 2026 (raised from prior $35B estimate)
CEO Sanjay Mehrotra specifically stated that 'HBM4 yields are meeting internal targets,' using a stronger expression than the previous quarter's 'on track' language. This substantially de-risks the HBM4 yield concern that was investors' top worry.
4Tariff Risk — Still Excluded from Guidance
Regarding tariffs, the 'potential tariffs not reflected in guidance' language was maintained again this quarter.
However, management emphasized expanding domestic US production as a natural hedge strategy:
- New York megafab under construction (CHIPS Act $6.4B)
- Potential for Section 232 exemption as the only US memory maker
- India assembly/test facility now operational
The market may view the exclusion of tariff risk from guidance as a negative, but Micron's strategic position as the US memory supplier is interpreted as providing an effective shield.
5Investment Implications
These results weaken the 'peak earnings' narrative.
- Q3 guidance raised — FY2026 annual EPS path of $36-38 (above prior consensus of $34)
- GM approaching 70% — structural margin expansion confirmed
- HBM4 yields on track — 2026H2 revenue acceleration expected
Bull Case probability rises: Among the Base/Bull/Bear scenarios, the Bull Case ($550-620) has become more likely. The +7.2% after-hours reaction suggests the market is beginning to reflect this.
However, with Brent crude at $108 and a hawkish FOMC stance, strong macro headwinds make it difficult for the semiconductor sector as a whole to benefit from tailwinds, so caution is warranted regarding short-term volatility.
SEPS 서프라이즈 히스토리
분기별 EPS 컨센서스 대비 서프라이즈(%) — 막대: EPS, 점선: 매출
컨센서스 대비 실제 EPS/매출 서프라이즈 (%)