Summary
Micron Technology will release its new quarterly earnings report on December 17, 2025 (post-market for U.S. stocks). The market is focused on the pricing and supply-demand environment of AI-driven HBM and DDR5, as well as the continuity of memory demand from data centers and smart devices.
Market Forecast
Consensus estimates show that Micron's total revenue this quarter is expected to be $12.709 billion, a year-over-year increase of 45.90%; adjusted EPS is expected to be $3.86, a year-over-year increase of 122.52%; and EBITDA is expected to be $5.068 billion, a year-over-year increase of 117.68%. The company's previous earnings call provided optimistic guidance for this quarter, focusing on a tight DRAM supply and improving NAND supply-demand conditions, product structure optimization, and cost execution, which are expected to lead to a sequential increase in gross margin and profitability. The company's main business highlights currently lie in the structural uptrend of HBM and high-end DRAM/enterprise SSDs, driven by AI data centers and inference demand spreading, improving pricing and portfolio. The existing business with the largest growth prospects is memory and storage related to data centers, with revenue hitting new highs in recent quarters and continuing to emphasize HBM as a core growth engine in the outlook, expecting revenue to maintain a high growth pace and expand to non-HBM DRAM and eSSD scenarios.
Previous Quarter Review
Last quarter, Micron's revenue was $11.315 billion, an increase of 46.00% year-over-year; gross margin was 44.67%, a significant improvement year-over-year; net profit attributable to the parent company was $3.201 billion, with a net profit margin of 28.29%, and net profit grew 69.81% sequentially; adjusted EPS was $3.03, a year-over-year increase of 156.78%. The company emphasized strong HBM demand, tight DRAM supply, and improving NAND, which drove up profit margins, as well as the positive impact of pricing and product mix exceeding expectations. In terms of main business, revenue from cloud storage was $4.543 billion, mobile and client business was $3.760 billion, core data center business was $1.577 billion, and automotive and embedded business was $1.434 billion; driven by AI-related investments and enhanced storage capacity of smart devices, data centers and high-end DRAM products became the driving factors.
This Quarter's Outlook
AI-Driven Server Memory Uptrend
The spread of AI training and inference to broader business scenarios brings continuous escalation in demand for HBM and high-density DDR5 modules. The company noted in earnings communication that tight DRAM supply and improving NAND conditions coexist, with product structure optimization and an improved price environment expected to continue elevating this quarter's gross margin and earnings performance. HBM, as a higher-value product, has reached pricing and supply arrangements with major customers for most of the 2026 HBM3E capacity, and is advancing HBM4 mass production preparation, emphasizing pin speed exceeding 11.00Gbps per second and better energy efficiency. Structural tightness owing to clean room expansion cycles, advanced node migration, and high consumption of wafer capacity by HBM forms persistent pricing and profit continuation, with DRAM and eSSD portfolio advantages expected to continue into subsequent quarters.
Data Center Storage and Enterprise SSD Structural Benefits
As AI inference concurrency and search enhancement are widely integrated, vector databases and KV Cache demand low latency, high throughput storage, driving the adoption of high-performance TLC and high-density eSSD. The company's communication repeatedly emphasized the continuous growth in data center spending, simultaneous improvement in traditional server and AI server demand, with average selling price and volume improvement of enterprise SSDs bringing profit recovery to NAND business. Customer inventory is at healthy levels, supplier inventory remains streamlined, and NAND price rebounds and product mix upgrades drive simultaneous improvement in revenue and profit this quarter. With HBM and DDR5 memory bandwidth and capacity demand increasing, data center-end complete machine storage ratio elevation provides stronger visibility for this quarter's revenue.
Secondary Contributions from Increasing Smart Terminal Storage Capacity
The penetration of AI PCs and the end of Windows 10 lifecycle drive the PC replacement cycle, AI functionalities in smartphones shifting to mid-end platforms, and the trend of increasing single-device DRAM and NAND capacity. The company mentioned clearer signals for the growth in phone and PC storage capacity demand in the earnings call, despite continuing macro uncertainty, client-side DRAM and high-capacity NAND demand improving driven by AI diffusion in devices and edge inference. It's expected that the mobile and client segments continue recovery this quarter, bolstered by the strong server and data center segments, optimizing the overall product structure to form multi-end collaborative revenue and profit uptrend.
Impacts of Capacity and Technology Node Transitions on Profitability Path
HBM's capacity and packaging testing occupancy is higher compared to regular products, coupling new clean room construction cycles and investment intensity, maintaining cautious and constrained supply expansion pace. The company emphasizes supporting both HBM and non-HBM shipments through advanced DRAM nodes 1-beta/1-gamma, managing product mix ROI with optimal capacity configuration and investment discipline. The HBM4E plan and part customization progress, under higher specifications and customized cooperation, are expected to bring better gross margin structure, providing marginal support for future quarters’ profitability. Current price trends and increased customer long-term agreements enhance business visibility, with possibilities of sequential improvement this quarter under joint effects of pricing, mix, and cost execution.
Analyst Perspectives
Bullish views dominate. Goldman Sachs recently stated that "strong price trends should drive quarterly performance upward, positioning the company well in 2026," estimating Micron's revenue this quarter at approximately $13.200 billion, above consensus expectations of $12.709 billion; EPS approximately $4.15, above the general expectations of $3.86. Several institutions and industry comments indicate HBM and DDR5 shortages driving price increases, lower than target DRAM inventory, continued NAND inventory declines, with data center business hitting new highs and extending into the next fiscal quarter. Reference to the company's statement on sequential gross margin lifting and structural improvements in DRAM/NAND supply-demand environments supports the bullish reasoning concentrated on strong price environment and structural uptrend. Combined with the company's last quarter performance exceeding expectations in revenue, gross margin, and adjusted EPS, and the optimistic guidance given for this quarter, institutions generally believe profitability elasticity is still being released, valuation pricing will revolve around AI memory supply shortage and high-spec product mass production progress.
Comments