Micron Guides Q2 to $18.7B Revenue and 68% Margins with $20B Capex
Micron's fiscal Q1 revenue rose 57% year-over-year to $13.64 billion, expanding gross margin by 1,100 bps to 56% and generating a record $3.9 billion in free cash flow, 20% above the 2018 supercycle. Q2 guidance targets $18.7 billion revenue with 68% margins, while $20 billion capex will boost HBM capacity sold out through 2026.
1. Record First-Quarter Performance
Micron posted $13.64 billion revenue in fiscal Q1, up 57% year-over-year and 21% sequentially, driving consolidated gross margin to 56% (up 1,100 bps), operating income of $6.4 billion (47% margin), $8.4 billion operating cash flow and record $3.9 billion free cash flow.
2. HBM Sales and Market Outlook
The company has sold out its High Bandwidth Memory supply for calendar 2025 and 2026, capitalizing on a market projected to grow from $35 billion to $100 billion by 2028 at a 40% CAGR, while HBM’s 3:1 wafer consumption ratio tightens standard DRAM supply and supports pricing power.
3. Capex Expansion and Risks
Management raised fiscal 2026 capex to $20 billion from $18 billion to build new fabs in Idaho and New York, with first production in mid-2027 and late-2028, while excessive lead times risk oversupply if AI-driven demand wanes.