In Micron’s fiscal 2026 first-quarter report, the company posted revenue of $13.6 billion, a 57% increase year over year, driven almost entirely by surging high-bandwidth memory (HBM) sales for AI workloads. Gross margins expanded to nearly 57% in that quarter, and management forecasts margins rising toward 68% in Q2, underscoring Micron’s ability to translate tight HBM supply into outsized profitability.

Micron now expects the HBM sector to grow from approximately $35 billion in 2025 to $100 billion by 2028, implying a roughly 40% compound annual growth rate. This $100 billion milestone has been pulled in two years earlier than previously projected, reflecting intensifying demand from data centers, edge devices, factory automation, aerospace and defense applications, and next-generation robotics.

Management reiterated that aggregate industry HBM supply will remain materially short of demand beyond calendar 2026. Micron is already fully booked on HBM shipments through the end of 2026, and has committed to multiyear contracts with key hyperscale customers. Planned capital expenditures of over $20 billion in the current fiscal year include new fabs and capacity expansions designed to alleviate the supply bottleneck beginning in 2027.

Despite a more than 260% rally in the past 12 months, Micron trades at roughly 12.5 times consensus forward earnings, with a PEG ratio near 0.7. Analysts at William Blair project that Micron’s earnings could nearly quadruple over the next two years, implying substantial room for multiple expansion as the supply–demand imbalance for HBM sustains elevated pricing power.