Micron Posts Record Q3 Earnings on AI Memory Surge: $41.5B Revenue, 84.9% Gross Margin, $100B in Long-Term Contracts

Q3 revenue $41.5B, up 4x YoY

Micron's third-quarter revenue vastly exceeded Wall Street estimates and represents roughly a 4x increase year-over-year, driven entirely by AI memory demand.

Gross margin 84.9% — all-time record

Highest gross margin in Micron's recorded history (data going back to 1990), more than doubling from a year prior. Q4 guidance projects margin rising further to ~86%.

Net profit $28.2B vs. $1.88B a year ago

Profit surged nearly 15x year-over-year, reflecting the pricing power Micron now holds as AI demand outstrips memory supply.

Q4 guidance: $49–51B revenue, ~$31 adj. EPS

Micron guided Q4 revenue of $49–51B and approximately $31 in adjusted EPS, both well above analyst expectations, indicating demand is accelerating into the back half of 2026.

$100B contracted, $22B deposits across 14 agreements

Micron signed 16 multi-year supply agreements with AI customers; 14 carry take-or-pay commitments representing ~$100B minimum contracted revenue and $22B in upfront cash deposits.

Micron to supply Anthropic; joined Series H

Micron announced a dedicated memory and storage supply agreement with Anthropic and disclosed participation in Anthropic's Series H funding round as a strategic investor.

Market cap: ~$91B (early 2024) → $1.2T today

Micron shares rose from approximately $83 to $1,048.51 during the AI boom — one of the most dramatic valuation expansions of any established chipmaker.

SOX index hit second-worst day before earnings; reset bearish narrative

The Philadelphia Semiconductor Index recorded its second-worst single-day loss of the past year just before Micron's earnings — results that sent shares 13%+ higher and rebutted the AI memory selloff narrative.

AI customers treating memory as strategic bottleneck

Micron stated AI system performance depends directly on memory performance and capacity, elevating memory from commodity to critical infrastructure. Hyperscalers are pre-securing multi-year supply rather than buying on spot markets.

Micron trades at 9x forward P/E despite surge

Low P/E reflects analyst expectations of continued profit explosion rather than cheap valuation — below Nvidia, Apple, S&P 500, and all Magnificent Seven members.

Apple fell 6% after raising Mac/iPad prices

Apple's stock dropped 6% (most in over a year) after raising prices on some Macs and iPads — illustrating how Micron's memory pricing power is cascading to end-product buyers downstream.

Micron FY2026 capex: $27B, nearly 2x FY2025

Micron is dramatically ramping capital spending to build new memory capacity; quarterly capex in FY2027 will exceed the FY2026 Q4 run rate of $10B/quarter, implying over $40B in annual capex for FY2027.

Lam Research +7%+ on Micron earnings

Equipment supplier Lam Research, which derives 39% of revenue from memory manufacturing equipment, surged after Micron's results signaled booming demand for memory fab tools.

SK Hynix doubling capacity; Samsung planning $648B

Industry-wide memory expansion is underway beyond Micron: SK Hynix intends to double its wafer capacity over five years, while Samsung plans $648B in chip investment in South Korea over the next decade.

AI memory stocks fall 3%+ on July 8

Micron, Sandisk, and Western Digital each declined over 3% on July 8 amid US/Iran tensions, Samsung record profit disappointment, and broader hyperscaler spending concerns. Intel, AMD, and Broadcom also declined.

DeepSeek developing own AI chip

Reuters reported DeepSeek is planning to develop proprietary AI chips, raising fresh competitive concerns for established semiconductor players and adding to sector selling pressure.

SK Hynix $28B US IPO: key test for AI trade

SK Hynix plans to raise approximately $28B through a US-listed IPO, viewed as a critical test of investor appetite for AI memory stocks amid the current market volatility.