Micron’s earnings are a must-watch market event — with profit growth approaching 1,000%
1 min read
The story
Micron's upcoming earnings are drawing outsized attention as the company's FY2025 revenue reached $37.4B, up nearly 49% YoY, with gross margins at 39.8% and net margins at 22.8% — a dramatic recovery from the prior cycle's losses. The AI-driven surge in High Bandwidth Memory demand is the core engine, and bulls argue the margin expansion is still early, with HBM supply constrained and pricing firm.
The risk heading into the print is that the stock has already repriced to reflect much of this optimism, meaning any guidance miss or softer HBM commentary could produce an outsized downside reaction despite strong headline numbers. Key things to watch: HBM volume and pricing cadence, DRAM/NAND pricing trajectory outside AI, and whether management raises or narrows FY2026 guidance.
The case — both sides
With gross margins at 39.8% and HBM supply still constrained by CoW packaging capacity, a beat-and-raise print could push MU toward sell-side price targets that cluster meaningfully above current levels, amplified by growing S&P 500 index weight pulling in passive flows.
MU's FY2025 revenue already reflects a near-50% YoY surge and $7.59 EPS, meaning consensus expectations are exceptionally elevated — any miss on HBM unit volumes, pricing, or FY2026 guidance could trigger a sharp de-rating since the stock is not cheap on normalized (non-AI) memory earnings.
The house read
Leans bullMU heads into a high-expectations earnings print with ~1,000% profit growth already in consensus — the question is whether HBM-driven margin expansion has further to run or whether the stock is already priced for perfection.
Wrong ifAny signal that HBM supply is loosening, that hyperscaler capex is being redirected, or that DRAM/NAND commodity pricing is softening outside AI could crater guidance; the stock is not cheap on normalized earnings and would de-rate hard on a cautious outlook.
Published read · research, not advice