MU Stock Drops After Hours: Micron’s Heightened Capex Forecast Overpowers Q4 Beat, Expectation-Beating Q1 Guidance

• Fourth-quarter revenue surged nearly 380% year-over-year to $54.23 billion, while full-year fiscal 2026 sales climbed to $133.19 billion. 
• Adjusted gross margins reached 87.0% in Q4, reflecting higher selling prices driven by supply constraints across the memory industry. 
• For the first fiscal quarter of 2027, Micron projects revenue of approximately $61.5 billion, significantly exceeding consensus estimates. 

Micron Technology Inc. (MU) reported record fourth-quarter and full-year financial results Wednesday that beat analyst expectations, driven by booming demand for memory chips as artificial intelligence data centers deploy at an increasing pace.

For its fiscal fourth quarter ended Sept. 3, 2026, Micron reported revenue of $54.23 billion, up 379% compared to $11.32 billion in the same period a year earlier. Adjusted net income for the quarter reached $38.40 billion, or $33.42 per diluted share, compared with an average analyst estimate of $31.83 per share.

For the full 2026 fiscal year, total revenue skyrocketed to $133.19 billion, up from $37.38 billion in fiscal 2025. Annual adjusted net income surged to $86.76 billion, or $75.52 per share.

Micron, the largest memory chipmaker in the U.S., has benefited from surging demand from AI data centers as hyperscalers ramp up agentic AI offerings. Micron also plans to hike its 2027 capex to address this surging demand, with most expenses coming from construction expenditure related to cleanroom space for storage chip manufacturing.

“Given the need for DRAM cleanroom space and supported by greater visibility from SCAs into our demand through the end of the decade and beyond, we plan to increase our capex (capital expenditures) in fiscal 2027 versus prior plans,” Sanjay Mehrotra, CEO, Micron said. 

“A majority of the increase is for construction capex, most of which is to help accelerate clean room space availability in late calendar 2028 and beyond.” 

Price Inflation And Supply Shortages Boost Margins

The surge in AI infrastructure spending has created a global memory shortage, driving up prices for high-bandwidth memory (HBM) and causing ripple effects across consumer hardware segments including PCs, smartphones, and gaming platforms.

Because production costs remained relatively stable relative to selling prices, Micron’s adjusted gross margin expanded to 87.0% in the fourth quarter, outperforming market projections of 86.2%. Operating cash flow for the quarter jumped to $43.97 billion, up from $5.73 billion in the prior-year period.

To support customer demand, Micron reported net capital expenditures of $10.77 billion for the fourth quarter and $27.37 billion for the entire fiscal year, while maintaining disciplined capacity expansions.

In fiscal Q1, Micron projected capex of around $11.5 billion and anticipates first-half fiscal 2027 capex to be approximately $25 billion. “We project capex to be higher in the second half of fiscal 2027. We expect a meaningfully higher growth rate in construction capex as compared to equipment capex in fiscal 2027,” Mehrotra added.  

First-Quarter Fiscal 2027 Outlook

Micron issued a strong forecast for the first quarter of fiscal 2027, signaling that tight supply conditions and heavy demand are expected to continue into the next fiscal year.

The company expects revenue of $61.5 billion, plus or minus $1.5 billion, well above the consensus estimate of $56.8 billion. Diluted earnings per share are projected at $38.15, plus or minus $1.00, compared to Wall Street projections of $36.02. Gross margin is expected to fall sequentially to 86.25% in Q1. 

MU Stock: Retail View 

Retail sentiment on Stocktwits was ‘extremely bullish’ with ‘high’ message volumes. 

One user highlighted a memory supply-demand mismatch aiding MU margins. 

MU stock has soared about 280% year-to-date. 

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