Micron Technology Inc (MU) Q2 2026 Earnings Call Transcript

Why It Matters

The results confirm Micron’s dominance in a constrained memory market and signal sustained revenue upside as AI‑driven demand outpaces supply, reshaping industry pricing dynamics.

Key Takeaways

• Record $13.6B revenue, 57% YoY growth
• Gross margin jumps to 56.8%, +11 pts QoQ
• Full 2026 HBM supply contracted, $100B TAM by 2028
• CapEx rises to $20B for HBM and 1‑gamma DRAM
• Supply constraints limit meeting 50‑66% of key demand

Pulse Analysis

Micron’s fiscal Q2 2026 results shattered multiple records, posting $13.6 billion in revenue—a 57 percent year‑over‑year rise—and a non‑GAAP EPS of $4.78, up 167 percent. The surge was powered by a 69 percent jump in DRAM sales, robust NAND growth, and a gross margin of 56.8 percent, the highest in the company’s history. Tight supply across the memory ecosystem amplified pricing power, while the firm’s aggressive cost discipline trimmed operating expenses. Free cash flow hit $3.9 billion, underscoring strong cash generation amid a booming AI‑driven data‑center market.

Looking ahead, Micron earmarked $20 billion of capital expenditures for fiscal 2026, a $2 billion increase aimed at expanding high‑bandwidth memory (HBM) capacity and scaling its 1‑gamma DRAM node. The company confirmed that all 2026 HBM volume and price agreements are locked in, positioning it to capture a projected $100 billion HBM total addressable market by 2028—a 40 percent compound annual growth rate. Parallel investments in G9 NAND and upcoming 1‑delta/1‑epsilon DRAM generations are set to sustain bit‑level growth and reinforce Micron’s technology leadership.

The combination of record earnings and constrained supply creates a double‑edged dynamic for customers. Micron disclosed it can satisfy only 50‑66 percent of mid‑term demand from several key accounts, prompting multiyear contracts with stronger commitment clauses. This scarcity is likely to keep memory pricing elevated, benefiting revenue but pressuring OEM margins. For investors, the firm’s balance sheet—$15.5 billion in liquidity and a $300 million share‑repurchase program—offers resilience, while its AI‑enhanced operations and GenAI adoption promise further efficiency gains. Micron’s trajectory suggests continued market share gains as AI and data‑center workloads intensify.