Micron Raises Capex to $25B, Guides Q3 Revenue to $33.5B at 81% Margin
Micron Technology delivered revenue of $23.9 billion, up 196% year-over-year, with DRAM sales of $18.8 billion and gross margin at 75% resulting in EPS of $12.20. It raised fiscal 2026 capex guidance to $25 billion and forecast Q3 revenue of $33.5 billion with an 81% margin, sparking a stock pullback over margin concerns.
1. Quarterly Results Overview
Micron reported fiscal second-quarter revenue of $23.9 billion, marking a 196% increase year-over-year, driven by DRAM sales of $18.8 billion (79% of total sales) and NAND revenue of $5 billion. Gross margin rose to 75%, up 18 points sequentially, while EPS surged 682% year-over-year to $12.20.
2. Investor Reaction and Stock Movement
Shares reached an intraday record near $470 before falling about 4% to $441 as investors locked in gains and weighed higher spending plans. The pullback reflects concern over margin sustainability despite robust demand in AI memory markets.
3. Capex Outlook and Guidance
Management raised fiscal 2026 capital expenditure guidance to $25 billion, up from the prior $20 billion outlook, to support ramped production capacity and next-generation memory technologies. The higher capex forecast underscores commitment to meet growing AI-driven demand but raises questions about near-term free cash flow.
4. Q3 Projections and Market Demand
For fiscal third quarter, the company guided revenue of $33.5 billion and an 81% gross margin, citing tighter supply and higher memory requirements for AI applications. Accelerating AI deployments and a first 5-year customer agreement aim to stabilize demand over the medium term.