Memory shortages are reshaping the profit landscape of the tech industry. Micron Technology reported a net profit of $37.7 billion for its fourth fiscal quarter ended September 30, while Apple’s net profit during the same period was $29.8 billion—Micron earned approximately $8 billion more in a single quarter.
This reversal was no accident. Market strategist Charlie Bilello summarized the logic in three tweets on X: "Apple needs chips. Micron has chips. Micron sets the price."
He added that Micron's net profit "soared 42-fold to $38 billion in just two years—$8 billion more than Apple's profit last quarter," and bluntly stated, "We have never seen such pricing power."
Tech investment analyst Beth Kindig also noted on X: "Micron is now generating more operating profit than Apple."
Micron's Numbers: From the Brink of Loss to Outpacing Apple
Micron's profit turnaround has been astonishing.
In fiscal year 2024, Micron's standardized earnings per share were just $1.30. By fiscal year 2026, this figure surged to $75.52. Of the 35 analysts covering fiscal year 2027, expectations project earnings per share to reach $176.15—implying that profits will more than double again within a single year.
Josh Brown, CEO of Ritholtz Wealth Management, publicly commented on Micron’s earnings guidance, saying: “It hasn’t been lowered at all—in fact, it’s been continuously raised.”
Micron expects revenue of $61.5 billion in the first quarter of fiscal year 2027, higher than the just-reported $54.2 billion. CEO Sanjay Mehrotra stated more directly in an interview with CNBC: “In fact, we simply cannot meet customer demand.”
The Cost of Apple: Gross Margins Face Continuous Pressure
Micron's pricing power is directly reflected in customers' bills.
Apple previously accumulated sufficient buffers through its consistently expanding gross margin, which rose from 41.8% in fiscal year 2021 to 46.9% in fiscal year 2025.
However, this buffer is being depleted. Excluding the impact of tariff refunds, Apple's gross margin declined from 49.3% in the March quarter to 48.1% in the June quarter, and guidance indicates a further drop to approximately 46.5% in the September quarter. Apple's management explicitly stated that memory costs were the primary driver of the gross margin decline in the June quarter and will continue to pressure margins in the September quarter, with the buffering effect from previously accumulated inventory gradually fading after September.
Apple's former CEO Tim Cook described the rise in memory prices as a "hundred-year flood" during the July earnings call.
Apple is not the only major buyer under pressure. John Armitage, co-founder of Egerton Capital, named NVIDIA on the podcast “In Good Company”: “A major issue NVIDIA faces is memory cost inflation and its impact on material costs.” However, he also noted that NVIDIA’s 75% gross margin provides significantly more room to absorb the impact than Apple.
Valuation: The market is still at a discount
Despite a significant increase in profitability, Micron's valuation remains low.
The current forward P/E ratio for Micron is 5.9x, significantly below its three-year average of 10.5x.
The market discount reflects skepticism about whether this super cycle can continue. However, according to TIKR analysis, as long as demand continues to outstrip supply, Micron’s pricing power will not disappear. Apple’s next earnings report, expected in late October, will be a key signal for the market, as it will reveal whether memory costs are still rising.
How long Micron’s pricing power will last remains a question in the market.
According to Reuters, 1,994 members of the union at Micron’s Taoyuan factory in Taiwan—99% of those who voted—authorized a strike over bonus disputes. Taiwan is a key production base for Micron’s DRAM and HBM.
However, the authorization to strike does not mean an immediate walkout—the union stated that the timing and details are still under discussion. Moreover, even if workers do go on strike, it would only further tighten an already scarce supply, which is not favorable for Apple’s memory costs.
Apple is set to release its first foldable smartphone, the iPhone Duo, on October 23, priced at $1,999. This may help Apple pass some cost pressures onto consumers—but Apple’s current guidance indicates it is still absorbing these costs itself.