Micron reports $40 billion in DRAM revenue, with AI-driven demand for memory in data center clusters cited as a primary growth engine.

Micron Technology's DRAM business has emerged as one of the biggest beneficiaries of the AI infrastructure boom. The company's DRAM revenues reached a record $39.8 billion in the fourth quarter of fiscal 2026, representing 73% of total revenues. Sales skyrocketed 343% year over year and grew 27% sequentially, driven by strong pricing and rising demand.

AI workloads are driving substantially higher memory requirements as models grow larger and more complex. Growing model sizes, longer context windows, and higher usage are increasing the amount of DRAM and storage needed to run AI efficiently. Micron expects server unit growth in the high-teens percentage range in both 2026 and 2027, providing favorable demand tailwinds for its DRAM products.

High-bandwidth memory (HBM) represents another critical growth opportunity. Micron's HBM revenues grew faster than total company revenues in the fiscal fourth quarter as shipments expanded across more customers. The company has also completed agreements covering most of its 2027 HBM bit supply at significantly higher prices compared with the prior year.

The broader DRAM market appears supportive of continued expansion. Micron expects industry DRAM bit shipments to grow in the low-20% range in 2027 and 2028, while the market remains supply constrained. The company sees no clear timeline for supply and demand to return to balance.

Given strong AI-driven demand, tight supply, and improving pricing, Micron's DRAM business appears well-positioned for growth. The Zacks Consensus Estimate for Micron's fiscal 2027 DRAM revenues is $204.04 billion, indicating a 102.7% surge from the $100.68 billion reported in fiscal 2026.

Micron's major competitors, SK hynix and Sandisk, are also benefiting from AI-led demand for memory and storage solutions. SK hynix, one of Micron's closest DRAM rivals with a strong HBM position critical for AI accelerators, generated 79.3 trillion Korean won in revenues in the second quarter of 2026, up 257% year over year, while operating profit surged 557% to 60.5 trillion won. HBM, AI-server DRAM, and enterprise SSDs drove the strong results.

Sandisk, more focused on NAND and storage than DRAM, is another beneficiary of AI infrastructure spending. Its fiscal 2026 revenues jumped 175% to $20.25 billion, while data-center revenues soared 437% to $5.15 billion. Fourth-quarter fiscal 2026 revenues surged 372% sequentially to $8.97 billion, reflecting strong demand for storage products in data centers.

Both companies highlight the broadening AI-driven demand for memory and storage, though Micron remains particularly well-positioned in DRAM and HBM. Micron shares have surged 281.2% year to date compared with the Zacks Computer and Technology sector's 25.8% return. The stock trades at a forward price-to-earnings ratio of 6.43, significantly lower than the sector's average of 21.39. The Zacks Consensus Estimate for Micron's fiscal 2027 and 2028 earnings implies year-over-year increases of 133.9% and 20.6%, respectively, with bottom-line estimates for both years revised upward in the past week.