Micron’s Q4 Earnings Report Approaches Amid Sharp Bull-Bear Divide

Introduction: Micron Technology (MU) will release its fourth-quarter fiscal year 2026 earnings report after market close on September 30 (Eastern Time), or early October 1 (Beijing Time). The company previously provided guidance of $50 billion in revenue (±$1 billion) and non-GAAP EPS of $3.10 (±$0.10). Wall Street’s consensus estimate is approximately $51.07 billion in revenue and adjusted EPS of $3.152, representing year-over-year growth of approximately 351% and 938%, respectively.

But the market’s focus on this earnings report extends beyond the quarterly numbers themselves. Some market participants believe that the improved performance has already been partially reflected in the stock price, and attention is also on how much longer this memory cycle can last. Prior to the earnings release, D.A. Davidson analyst Gil Luria reiterated his $2,000 price target, implying approximately 87% upside from the September 29 closing price of $1,071.72; meanwhile, famed short-seller Michael Burry simultaneously replaced his short position in Micron with put options expiring in June next year with a strike price of $500. One side sets a $2,000 price target, while the other expresses a bearish view through put options with a strike price of around $500.

First, look at the numbers themselves. The company guided for revenue of $50 billion (±$1 billion) and non-GAAP EPS of $31 (±$1), but several institutions provided more optimistic forecasts:

• Citigroup: Revenue of $51 billion, EPS of $31.45;
• Goldman Sachs: Revenue of $51.9 billion, EPS of $32.54;
• UBS: Revenue of $52.4 billion, EPS of $32.50, most aggressive;
• JPMorgan Chase (Harlan Sur): Revenue of $51.4 billion, gross margin of 86.2%, and EPS of $31.73 all exceeded market consensus expectations.

What does $50 billion in quarterly revenue mean? Micron’s total revenue for the entire fiscal year 2025 was approximately $37.1 billion—this single quarter’s revenue exceeds the entirety of the previous year’s total.

From realized performance to structural variables, this earnings report presents three key uncertainties: whether guidance will exceed already elevated market expectations, the timing of HBM4 mass production and its revenue impact, and how standard DRAM price trends and capital expenditure plans will inform the industry’s outlook.

Morgan Stanley's forecast for the quarter is relatively conservative: expected revenue of $50.024 billion, a year-over-year growth of 342.1%, a gross margin of 86.4%, and earnings per share of $31.20, below the market expectation of $31.49. However, Morgan Stanley also expects Micron to raise its earnings guidance, though the increase will be smaller than in previous quarters.

From an industry supply and demand perspective, a key structural factor currently attracting market attention is that HBM capacity expansion may squeeze part of the traditional DRAM supply, while demand for traditional DRAM still persists.

Samsung Electronics Executive Vice President Kim Taewoo provided a key figure in his latest statement on September 29: HBM is expected to account for nearly 30% of global DRAM wafer capacity by 2027, up from approximately 20% today. Wuhan Securities’ projection is even more precise—HBM’s share of total DRAM capacity is projected to rise from 12.3% in 2024 to 17.1% in 2025, 20.8% in 2026, and reach 22.5% in 2027. The wafer capacity required for HBM4 is roughly three times that of general-purpose DRAM, making the ramp-up of HBM4 production inevitably reduce available capacity for traditional DRAM. Apacer Chairman Chen Li-bai confirmed that all of the three major manufacturers’ 2027 capacity has been sold out, with HBM and AI server applications consuming approximately 70% of total DRAM output.

Micron’s uniqueness lies in being the only one of the three major memory manufacturers with significant exposure to both HBM and traditional DRAM. While Samsung and SK Hynix have a higher revenue share from HBM, Micron’s larger traditional DRAM and NAND businesses mean its profitability may be more sensitive to fluctuations in traditional DRAM prices. BMO’s channel checks indicate that the upside potential from server DDR5 price increases is greater than that from HBM; HBM3E and HBM4 prices are likely to rise sequentially, while demand for consumer memory remains weak.

Micron’s own progress is also accelerating: 12-layer HBM4 designed for NVIDIA’s Vera Rubin platform began volume shipment in Q1 2026, offering more than 20% higher energy efficiency compared to HBM3E, with cumulative revenue from shipments surpassing $1 billion. Micron’s CEO Mehrotra stated on the June earnings call that the ramp speed of 12-layer HBM4 is approximately twice that of 12-layer HBM3E. According to industry sources, Micron’s monthly HBM production capacity is expected to double to 100,000 wafers by year-end, with HBM4’s share of total HBM output rising from around 20%–30% at the beginning of the year to as high as 50% by year-end.

Luria, who reiterated his $2,000 price target the night before the earnings report, is among the highest on Wall Street. He raised his target from $1,500 to $2,000 in June, citing Micron’s entry into the phase with the best visibility in the semiconductor industry and sustained storage supply-demand tightness through at least 2027.

His core argument has three layers:

1. Luria believes that the current pricing in the HBM market is significantly influenced by supply constraints, with demand remaining strong, while new supply still requires time to come online.
2. Micron's earnings visibility is extending. HBM orders are typically locked in more than a year in advance, and a significant portion of 2027 revenue can already be reasonably forecasted.
3. The valuation method is shifting. He wrote in the report: "This storage cycle is a comprehensive cycle encompassing GPUs, CPUs, and memory. AMD and Intel are trading at P/E ratios of 40–60 times, while Micron’s P/E ratio is only 7 times."

Luria also mentioned a recent development: Meta's Muse has been highly successful, opening up entirely new use cases for consumers. "Just a few weeks ago, we were concerned that Meta’s storage demand might weaken; now, that possibility seems very unlikely."

But the nearly $500 difference between Wall Street’s average target price of $1,520 and $2,000 underscores the lack of consensus on whether Micron is a cyclical or a growth stock. JPMorgan maintains an "Overweight" rating with a $1,540 target price, forecasting this quarter’s revenue, gross margin, and EPS to exceed market consensus, and attributes the slowing price increase to sales timing rather than weakening demand. UBS maintains a $1,625 target price, expecting DRAM supply shortages to persist at least through the second quarter of 2028, and anticipates Micron will initiate share repurchases starting in the second quarter of fiscal 2027, with an initial scale of approximately $20 billion per quarter.

In stark contrast to Luria is Michael Burry, the "Big Short."

According to China Securities Market Intelligence, Burry revealed in his latest weekly update to investors that he has largely replaced his existing short positions in major AI stocks with put options, specifically replacing his short position in Micron with put options expiring in June next year with a strike price in the $500 range. Burry stated: "Given the shortened timeline, I want greater leverage in my short positions."

He believes that the structural shortage of memory chips spurred by the current AI construction boom is temporary, and the industry will eventually return to its traditional cycle of boom and bust: "Within the next two years, as supply catches up with demand, this shortage will disappear, and memory chips will re-enter a downward cycle."

Citigroup analysts also warned ahead of the earnings report that DRAM and NAND prices will slow over the next few quarters; Bernstein expects the storage cycle to begin "normalizing" by 2028. Historically, some memory stocks have experienced significant price volatility or pullbacks even during strong earnings periods, but past performance is not indicative of future results.

1. Yield ramp-up for HBM4. HBM4 is still in the early stages of mass production, with yields lower than those of the previous generation, HBM3E, and requiring more DRAM capacity during manufacturing. If yield improvements lag behind expectations, Micron’s shipment cadence for HBM products could be impacted. The market is also closely monitoring whether capacity ramp-up meets expectations, the progress of customer certifications, and the timing of revenue realization—since large-scale downstream platform shipments may be concentrated in 2027, HBM4’s significant revenue contribution is likely to materialize primarily in the next fiscal year.
2. Price elasticity of traditional DRAM and capital expenditures. According to Bank of America analysts, the key data the market truly cares about is Micron’s guidance for gross margin and capital expenditures for fiscal year 2027: if the gross margin can be maintained at approximately 85%, the earnings per share forecast of $150–$200 will be supported; capital expenditures are expected to be in the mid-to-high range of over $40 billion, with a significant portion allocated to cleanroom construction and not immediately translating into increased production capacity. However, if market expectations for the memory cycle outlook change, Micron’s stock price may still experience volatility, even if actual performance exceeds market expectations.
3. Pressure from the macro interest rate environment. On September 28, Micron declined 2.61%, while the Philadelphia Semiconductor Index fell 1.61%, as surging U.S. Treasury yields weighed on all high-valuation tech stocks. If the Fed continues to raise rates in October, high-beta memory stocks may face additional valuation pressure in a tightening liquidity environment.

The market has high expectations for Micron’s upcoming earnings report. Key areas of focus include HBM pricing, traditional DRAM supply and demand, and AI capital expenditures. However, actual results may still differ from market expectations. Beyond the financial numbers, the market will also pay close attention to management’s outlook for 2027 and how investors perceive Micron’s future business cyclicality and growth potential.

Luria's $2,000 price target and Burry's put options reflect differing market views on Micron's future performance. The earnings report and management guidance will provide the market with further insight.

For this earnings report, which factors are you most focused on—HBM supply and demand, traditional DRAM prices, capital expenditures, or management’s outlook on the upcoming cycle?

Disclaimer: This article is provided solely for general informational and educational purposes and does not constitute any investment advice, recommendation, offer, or solicitation, nor should it be considered as a basis for buying, selling, or holding any securities or other financial products. The views, forecasts, target prices, and any other forward-looking information contained herein are sourced from relevant third parties or public materials and do not represent BIT’s investment opinions or recommendations. Market conditions may change at any time, and actual results may differ materially from the forecasts or expectations provided. Investing involves risks; investors should make independent investment decisions based on their own circumstances and seek professional advice when necessary.