Micron Technology (NASDAQ:MU) highlighted record results for fiscal second-quarter 2026 and issued guidance it said would set additional single-quarter highs in fiscal Q3, as executives pointed to AI-driven demand, structural industry supply constraints, and improved pricing as key drivers.
Record quarter and raised outlook
CEO Sanjay Mehrotra said Micron delivered “exceptional” fiscal Q2 results with records in revenue, gross margin, earnings per share, and free cash flow. He added that quarterly revenue nearly tripled from a year earlier and that DRAM, NAND, HBM, and each business unit reached new highs.
Fiscal Q2 financial details
CFO Mark Murphy said revenue, gross margin, and EPS all exceeded the high end of Micron’s guidance. He also said the company generated record free cash flow, reduced debt, and ended the quarter with the highest net cash position in its history.
- Total revenue: $23.9 billion, up 75% sequentially and up 196% year-over-year; the fourth consecutive quarterly revenue record.
- DRAM revenue: $18.8 billion (79% of revenue), up 207% year-over-year and up 74% sequentially; bit shipments up mid-single digits, with prices up in the mid-60% range.
- NAND revenue: $5.0 billion (21% of revenue), up 169% year-over-year and up 82% sequentially; bit shipments up low single digits, with prices up in the high 70% range.
- Gross margin: 75%, up 18 percentage points sequentially, driven primarily by higher pricing and aided by mix and cost performance.
- Non-GAAP EPS: $12.20, up 155% sequentially and 682% year-over-year.
- Free cash flow: $6.9 billion on operating cash flow of $11.9 billion and capex of $5.0 billion.
By segment, Murphy said all business units posted record revenue: Cloud Memory Business Unit revenue of $7.7 billion, Core Data Center Business Unit revenue of $5.7 billion, Mobile and Client Business Unit revenue of $7.7 billion, and Automotive and Embedded Business Unit revenue of $2.7 billion. He said operating expenses were $1.4 billion, up $87 million sequentially due to higher R&D, while operating income totaled $16.5 billion for an operating margin of 69%.
Micron ended the quarter with $16.7 billion in cash and investments and liquidity above $20 billion including an untapped credit facility. During the quarter, the company repurchased $350 million of shares “as permitted by the terms of the CHIPS Agreement” and reduced debt by $1.6 billion, finishing with $10.1 billion of debt and net cash of $6.5 billion.
Dividend increase and capital allocation
Management announced an increase in the quarterly dividend, though figures described on the call differed. Mehrotra said the board approved a 13% increase, while Murphy said the board approved a 30% increase to $0.15 per share.
Murphy said Micron’s top capital allocation priority remains reinvesting in profitable growth across R&D, capex, and other strategic investments, alongside maintaining a strong balance sheet. In response to a question about using cash for buybacks, he said Micron expects “significant capacity” over time for returning cash through repurchases, including offsetting stock-compensation dilution and opportunistic buybacks.
AI-driven demand, tight supply, and strategic customer agreements
Mehrotra said AI is increasing memory demand and “recast memory as a defining strategic asset in the AI era.” He said Micron is working with customers on strategic customer agreements (SCAs) that differ from prior long-term agreements, describing them as multi-year arrangements intended to provide improved visibility and stability for Micron and greater certainty for customers. He said Micron signed its first five-year SCA and is in discussions with multiple customers across multiple markets, but declined to provide details on pricing, cancellation terms, or other specifics, calling the agreements confidential and “robust.”
On supply conditions, Mehrotra said both AI and traditional server demand are constrained by inadequate DRAM and NAND supply. He said Micron previously indicated it could fulfill only 50% to two-thirds of customer demand in the medium term, and said that remains the case. He also said AI demand will drive data center DRAM and NAND bit total addressable market to exceed 50% of the industry total addressable market for the first time in calendar 2026.
Technology roadmap, HBM updates, and manufacturing expansion
Mehrotra highlighted progress on Micron’s 1-gamma DRAM and G9 NAND node ramps, saying 1-gamma is on track to become a majority of DRAM bit mix by mid-calendar 2026 and G9 NAND is expected to constitute a majority of NAND bits by mid-calendar 2026. He said the company achieved a record mix of QLC bits in the quarter and plans to increase EUV adoption at the 1-delta DRAM node with the latest generation EUV tools.
In HBM, Mehrotra said Micron began volume shipment of its HBM4 36GB 12-high product in the first quarter of calendar 2026 and that it is designed for NVIDIA Vera Rubin. He said Micron has sampled an HBM4 16-high product providing 48GB per HBM cube and that development of HBM4E is underway with a volume ramp expected in calendar 2027. When asked about the HBM market outlook, Mehrotra said Micron had not updated the HBM total addressable market figures previously provided and added that while non-HBM margins are currently higher than HBM margins, demand for HBM remains strong.
Murphy guided fiscal Q3 to revenue of $33.5 billion plus or minus $750 million, gross margin of about 81%, operating expenses of about $1.4 billion, and EPS of $19.15 plus or minus $0.40, based on approximately 1.15 billion shares. He said higher price, lower cost, and favorable mix are expected to contribute to gross margin expansion in Q3, while noting Micron is not providing fiscal Q4 gross margin guidance. On sustainability, he and Mehrotra said they expect tight market conditions to persist beyond 2026, citing factors such as cleanroom constraints, long construction lead times, the higher HBM trade ratio, and declining bits-per-wafer growth from node migrations.
Micron also detailed steps to expand capacity. Mehrotra said the company closed its acquisition of the Tongluo site from Powerchip Semiconductor ahead of schedule and expects meaningful product shipments from the existing fab beginning in fiscal 2028, with plans to begin construction of a second cleanroom there by the end of fiscal 2026. He also provided updates on U.S., Japan, and Singapore projects, including breaking ground on a new NAND fab in Singapore with initial wafer output expected in the second half of calendar 2028, commencement of commercial shipments from a new assembly and test facility in India, and an advanced packaging facility in Singapore expected to contribute meaningfully to HBM supply in calendar 2027.
For capital spending, management said fiscal 2026 capex is now expected to be above $25 billion, with fiscal Q3 capex around $7 billion. Mehrotra said fiscal 2027 capex is projected to step up meaningfully, including construction-related capex increasing by over $10 billion year-over-year, and Murphy said Micron expects construction spend growth to outpace equipment spend growth in both fiscal 2026 and fiscal 2027.
About Micron Technology (NASDAQ:MU)
Micron Technology, Inc is a global semiconductor company that designs and manufactures memory and storage solutions. Its product portfolio includes dynamic random-access memory (DRAM), NAND flash memory, solid-state drives (SSDs), memory modules and embedded memory solutions for a wide range of computing and electronic devices. Micron supplies components used in data centers, enterprise and cloud infrastructure, client computing, mobile devices, automotive systems and industrial applications, and also markets consumer-facing products under the Crucial brand.
Founded in 1978 and headquartered in Boise, Idaho, Micron has grown into an international manufacturer with research, development and production facilities across multiple regions.
