There are earnings beats and then there are the kind of quarterly prints that force analysts to reconsider their fundamental assumptions about a company. Micron Technology‘s fiscal second quarter results, released Wednesday evening, land squarely in the second category, delivering numbers that cleared the bar by a margin that would have seemed implausible even six months ago.
Revenue came in at $23.86 billion, nearly tripling from $8.05 billion in the same quarter a year earlier and running $3.79 billion ahead of the $20.07 billion Wall Street consensus. Adjusted earnings per share reached $12.20 against expectations of $9.31, a beat of more than 31%. GAAP net income stood at $13.79 billion, with operating cash flow surging to $11.9 billion, a sequential gain of 42%.
The numbers are being driven by something structurally different from a typical memory upcycle. AI infrastructure buildout is consuming memory at a pace that’s creating a shortage environment across both DRAM and NAND, and Micron is positioned directly in the path of that demand surge. Cloud Memory Business Unit revenue alone reached $7.75 billion, up more than 160% from the year-ago period.
CEO Sanjay Mehrotra framed it in terms that make the scale of the shift clear: “The step-up in our results and outlook are the outcome of an increase in memory demand driven by AI, structural supply constraints and Micron’s strong execution across the board.” What’s notable is that supply constraints are doing a significant amount of work in that sentence — the company has essentially locked in its entire 2026 HBM supply through price and volume agreements.
Fiscal Q2 operating margin hit 69%, up 22 percentage points sequentially and 44 points year over year. Free cash flow of $6.9 billion set a company record, surpassing even the elevated Q1 2026 figure by 77%. The company ended the quarter with $16.7 billion in cash, marketable investments, and restricted cash, its strongest net cash position in history.
The DRAM story is particularly striking. DRAM revenue hit $18.8 billion in the quarter, up 207% year over year, with prices climbing in the mid-60s percentage range driven by tight industry conditions and favorable product mix. NAND revenue came in at $5 billion, up 169% annually with prices rising in the high-seventies percentage range, a figure that reflects the severity of the supply crunch.
For context, Micron’s stock has gained roughly 62% year to date, even as most of the top 10 US technology companies have seen double-digit percentage drops. It is the only one of them trading in positive territory, a remarkable divergence that reflects the degree to which the AI memory narrative has separated Micron from the broader tech sell-off.
Looking ahead, Q3 guidance projects revenue of approximately $33.5 billion, implying year-over-year growth of more than 200%, with adjusted EPS around $19.15. Those numbers exceeded analyst consensus by a meaningful margin even before they were released, and they suggest the supply-demand dynamic hasn’t softened. The company is committing to capital expenditures above $25 billion for fiscal 2026, with a meaningful further step-up planned for fiscal 2027 as HBM and DRAM manufacturing capacity expands.
Volume production of HBM4, designed for Nvidia’s Vera Rubin chip, began in the fiscal first quarter, and the next-generation HBM4e products are scheduled to ramp in 2027. The median analyst price target heading into earnings was $450, with Bernstein’s Mark Li sitting at $510 and RBC’s Srini Pajjuri at $525. Given the magnitude of the beat and the forward guidance, those targets may start to look conservative by morning.
