Micron Technology announced its fiscal Q1 2026 financial results, reporting $13.6 billion in net revenue. The company is a supplier of high-bandwidth memory (HBM) products, for which demand is reported to be increasing due to growth in artificial intelligence (AI) applications.
Market Positioning and Demand
Micron Technology supplies HBM3E and HBM4 products, which are utilized in AI servers alongside Graphics Processing Units (GPUs) to facilitate AI workloads. Demand for HBM is experiencing an increase due to growth in AI applications. Reports indicate a shortage of HBM, which has led customers to commit to purchases and reserve production capacity. Micron has stated that a significant portion of its HBM capacity for late 2025 and all of 2026 is currently subject to committed orders.
Competitors in the HBM market include SK Hynix and Samsung Electronics. Western Digital operates in related storage markets. Analyses have noted the cyclical nature of the memory market, where demand fluctuations can occur, contrasting with the current margin benefits provided by HBM.
First Quarter Fiscal Year 2026 Financial Results
Micron reported net revenue of $13.6 billion for Q1 2026. Source 1 stated this represented a 21% increase quarter-over-quarter, while Source 2 reported a 56% increase in quarterly revenue for the same period. The gross margin for the quarter expanded to approximately 57%. The company reported earnings per share of $4.60 and free cash flow exceeding $3 billion. CEO Sanjay Mehrotra commented that the company achieved record revenue and margin expansion, noting records across revenue, gross margin, earnings per share, and free cash flow.
Second Quarter Fiscal Year 2026 Guidance
For fiscal Q2, Micron has provided guidance anticipating approximately $18.7 billion in revenue, with a margin of plus or minus $400 million. Gross margins are projected to be around 67%, and the estimated profit per share is $8.19, with a margin of plus or minus $0.20.
Analyst Perspectives and Market Outlook
Following Micron's fiscal Q1 2026 earnings report, Mark Li, an analyst from Bernstein SocGen Group, raised his price target for Micron Technology stock to $330 and assigned an "outperform" rating. Li forecasts rising DRAM prices throughout 2026, anticipating a 20% to 25% sequential increase in DRAM prices for Q2. This outlook is linked to increased data center demand driven by artificial intelligence, coupled with the time required for supply expansion. Li also expressed a concern that Micron's stock could face negative repercussions if management expectations lead to an overestimation of delivery.
A survey of 40 analysts provided an average one-year price target of $290.92 for Micron Technology Inc., with a high estimate of $500.00 and a low estimate of $86.28. GuruFocus estimates the GF Value for Micron Technology Inc. in one year at $322.47.