Jim Cramer Still Loves Micron. Here Is the 1 Number That Shows Why He Is Right.

By Joel South Published Jul 23, 9:21AM EDT

Quick Read

Micron's GAAP gross margin hit 85% in Q3 FY26, up from 38% a year ago, a level of profitability that approaches software-tier margins almost never seen in chip manufacturing.
MU revenue surged 346% year over year to $41 billion, beating consensus by 18%, with Q4 guidance targeting $50 billion and 86% gross margins.
MU shares have gained 759% over the past year but pulled back 14% from June highs, with Q4 earnings as the next major catalyst.
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Jim Cramer Still Loves Micron. Here Is the 1 Number That Shows Why He Is Right. — © Shutterstock

84.6%. That is Micron’s GAAP gross margin in fiscal Q3 2026, up from 37.7% in the same quarter a year ago. The figure was reported when Micron Technology (NASDAQ:MU | MU Price Prediction) filed its Q3 FY26 results on June 24, 2026. Memory chip companies are supposed to live and die by cycles. A gross margin near 85% is what software businesses print. That is the reveal.

What It Means

Gross margin is the cleanest read on pricing power a manufacturer can offer, and Micron’s just went vertical. The sequential progression tells the whole story: 44.7% in Q4 FY25, 56.0% in Q1 FY26, 74.4% in Q2 FY26, and 84.6% in Q3 FY26. That is a company that has repriced its book of business around AI memory scarcity, well beyond a normal upcycle.

The revenue base carrying those margins is real. Q3 FY26 revenue landed at $41.46 billion, beating the $35.25 billion consensus by 17.60% and rising 345.7% year over year from $9.30 billion. Non-GAAP diluted EPS came in at $25.11, ahead of the $20.28 consensus. Operating income of $33.32 billion grew 1,436.1% year over year, roughly four times faster than revenue. That is the fingerprint of operating leverage that only shows up when fixed costs get overwhelmed by pricing.

Where is it coming from? Cloud Memory revenue hit $13.77 billion, Core Data Center $11.52 billion, Mobile and Client $11.52 billion, and Automotive and Embedded $4.63 billion. HBM4, Micron’s high-bandwidth memory product for AI accelerators, is in high-volume shipments to a lead customer, with HBM4E targeting volume production in calendar 2027. Free cash flow reached $18.30 billion in the quarter alone, up 995.4% year over year.

Market Reaction

MU closed the most recent trading session at $970.82 on July 21, 2026, up 12.17% on the day from $865.46. Year to date, the stock is up 240.36%, from $285.23 on December 31, 2025. Over the past year, shares are up 758.78% from $113.05. The one-month picture is more muted, with the stock down 14.38% from $1,133.82 on June 18, 2026, a sign that the rally has taken some heat off recently even as the fundamentals keep accelerating.

Bull Case

Jim Cramer has been vocal on Micron for years, and the Q3 numbers give that stance a firm footing. Three points anchor the case.

First, the margin story is set to keep climbing. Q4 guidance points to revenue of $50.0 billion plus or minus $1.0 billion, non-GAAP EPS of $31.00 plus or minus $1.00, and gross margin near 86%. That is guidance, not reported, but it lines up with the direction of travel.

Second, the durability profile is changing. CEO Sanjay Mehrotra told investors that “Micron’s record fiscal Q3 financial results and even stronger outlook for Q4 reflect the strategic value of memory in the AI era” and that “multi-year Strategic Customer Agreements will significantly enhance the durability and predictability of Micron’s strong financial performance”. Long-dated contracts against a historically cyclical product line take some of the whip out of the tail.

Third, capital return is showing up alongside the growth. The company paid a $0.15 quarterly dividend on July 21, 2026 and repurchased $650 million of stock in the nine months ended May 28, 2026. For retirement-focused holders, that combination of cash return and reinvestment (Q3 capex ran $7.83 billion, up 166.37% year over year) is what a durable compounding story looks like.

Retail is not universally on board. The most persistent bearish Reddit post over the last month, “Micron will peak and leave all you retail with heavy bags,” has climbed from 305 to 400 upvotes on r/investing. Skepticism at a $1 trillion-plus market cap is healthy. The counterweight is that the reported numbers, not sentiment, are what will price this stock.

Bottom Line

An 84.6% gross margin is what happens when a supply-constrained producer meets AI-scale demand. Micron’s market cap has scaled with the results, and Q4 guidance points higher on every line that matters. The next catalyst is the fiscal Q4 FY26 earnings report, where management has set the bar at $50 billion in revenue and $31.00 in non-GAAP EPS. Cramer’s conviction has one number to lean on. It happens to be the loudest number in the memory business.

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About the Author Joel South →

Joel South covers large-cap stocks, dividend investing, and major market trends, with a focus on earnings analysis, valuation, and turning complex data into actionable insights for investors.

He brings more than 15 years of experience as an investor and financial journalist, including 12 years at The Motley Fool, where he served as an investment analyst, Bureau Chief, and later led the Fool.com investing news desk. He has also co-hosted an investing podcast and appeared across TV and radio discussing market trends.