Micron reports HBM4 revenue exceeding $1 billion and profit surging 15-fold, demonstrating record demand and margins for AI memory infrastructure.
Fueled by the AI boom, Micron delivered a blockbuster quarter in fiscal 3Q2026, with revenue surging 74% sequentially and profit more than doubling from the previous quarter. Gross margin climbed to a record 84.9%, well above the company's 81% forecast and up sharply from 74.9% in the prior quarter.
The strong performance comfortably surpassed Wall Street expectations. Micron posted fiscal third-quarter revenue of $41.46 billion, well ahead of the consensus estimate of $35.85 billion. Net income soared to $28.24 billion, or $24.46 per share, compared to $1.89 billion, or $1.68 per share, a year earlier—marking nearly a 15-fold increase in quarterly profit. Adjusted earnings reached $25.11 per share, significantly ahead of analysts' expectations of $20.78 per share.
Micron issued an upbeat outlook for the fourth quarter, guiding for revenue of around $50 billion, plus or minus $1 billion, well above the $43.58 billion consensus estimate.
This bullish trajectory aligns with TrendForce's latest assessment. As AI development shifts from large-scale model training toward inference-centric Agentic AI applications, memory demand is expanding structurally. TrendForce has significantly raised its global memory market forecasts, increasing its 2026 estimate from $551.6 billion to $889.3 billion. The momentum is expected to accelerate into 2027, with TrendForce revising its 2027 forecast upward from $842.7 billion to more than $1.28 trillion, implying annual growth of roughly 44%.
Notably, Micron's HBM4 revenue has exceeded $1 billion, following Samsung's early lead in reaching that milestone. The company's HBM4 12-high ramps nearly twice as fast as HBM3E 12-high, according to management.
Despite aggressive capacity additions across the industry, supply constraints are expected to remain a defining theme for years. CEO Sanjay Mehrotra indicated that tight market conditions are likely to persist beyond 2027. While industry output may gradually improve in 2028, there is still no clear indication of when memory supply will fully catch up with demand.
Against this backdrop, Micron is increasingly relying on long-term agreements to secure demand visibility and support future expansion. The company expects approximately $22 billion in financial commitments tied to 16 long-term customer agreements. Mehrotra noted that strategic customer agreements are expected to account for roughly half—or even more—of Micron's total revenue once fully in place.
With customer commitments continuing to grow, Micron is stepping up investment in new production capacity. Fourth-quarter capital expenditures are projected to reach around $10 billion, exceeding analysts' expectations of $8.89 billion and underscoring the company's commitment to meeting sustained AI-driven memory demand.