Micron’s Earnings Guidance May Look Weak Tomorrow. Buy MU Stock Anyway
Micron (NASDAQ:MU | MU Price Prediction) reports fiscal fourth-quarter results tomorrow after the close. Shares are up 273.63% year to date, so the fiscal Q1 outlook will move the stock more than the quarter itself. Record Numbers Meet a Restless…
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Micron (NASDAQ:MU | MU Price Prediction) reports fiscal fourth-quarter results tomorrow after the close. Shares are up 273.63% year to date, so the fiscal Q1 outlook will move the stock more than the quarter itself.
Record Numbers Meet a Restless Stock
Last quarter, revenue reached $41.46 billion, up 345.7% year over year. Non-GAAP EPS of $25.11 beat the $20.28 consensus, which made seven consecutive EPS beats. Gross margin hit a record 84.9%.
Management guided fiscal Q4 to $50.0 billion in revenue (plus or minus $1.0 billion), EPS of $31.00 and gross margin near 86%. Management also said the outlook reflects “a meaningful moderation in the rate of price increases.”
The stock’s reaction shows how high the bar sits. Shares jumped 15.74% on report day in June, then fell 32.39% over the next 30 days. They have climbed 14.24% over the past month to $1,065.71.
Consensus Calls for Another Record Quarter
| Metric | Consensus | Year-Ago | YoY Growth |
|---|---|---|---|
| FQ4 Normalized EPS | $31.3542 | $3.03 | 934.8% |
| FQ4 Revenue | $50.97 billion | $11.32 billion | 350.5% |
| FY2026 EPS | $73.4591 | $8.29 | 786.1% |
| FY2026 Revenue | $129.86 billion | $37.38 billion | 247.4% |
Check the Calendar Before Judging the Guide
Fiscal Q4 has 14 weeks instead of the normal 13. Fiscal Q1 goes back to 13, so the sequential guide can look softer even if the weekly revenue run rate stays strong. On a 13-week basis, the $50 billion midpoint works out to roughly $46.43 billion.
Analysts already model fiscal Q1 revenue of $56.85 billion and EPS of $34.9476. If the guide comes in below those numbers, I’d account for the missing week before responding.
Beyond the calendar, I’m watching three things:
- New SCAs: Micron has signed 16 Strategic Customer Agreements. Fourteen of them carry about $100 billion of revenue at floor prices, and management expected about $10 billion in customer deposits this quarter. Each new deal adds visibility.
- HBM4 share: Share holding around 20% would show Micron keeping pace in AI accelerators. Management targets HBM share close to its DRAM share, and HBM4 12-high is ramping twice as fast as HBM3E 12-high.
- Supply timing: Management expects tightness beyond 2027 and only gradual supply improvement in 2028. Idaho’s ID2 fab targets first wafer output in late-calendar 2028. The longer meaningful new supply stays pushed into 2028, the longer pricing power holds up.
A Softer Guide Could Mask Stronger Earnings Power
Micron trades at 24x trailing earnings and 7x forward earnings. It has 44 buy ratings and an average target of $1,520.76. Polymarket traders put the odds of an EPS beat at 0.96.
A beat rarely ensures a rally. Micron topped estimates in each of its last 8 reports, but on average the stock fell 3.44% in the week that followed.
If SCAs keep adding up and supply stays tight into 2028, a lower Q1 guide caused by the shorter quarter tells you little about where earnings are headed.
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After two decades of patrolling the dark corners of suburbia as a police officer, Rich Duprey hung up his badge and gun to begin writing full time about stocks and investing. For the past 20 years, he’s been cruising the markets looking for companies to lock up as long-term holdings in a portfolio while writing extensively on the broad sectors of consumer goods, technology, and industrials. Because his experience isn’t from the typical financial analyst track, Rich is able to break down complex topics into understandable and useful action points for the average investor. His writings have appeared on The Motley Fool, InvestorPlace, Yahoo! Finance, Money Morning, and, of course, 24/7 Wall St. He has been featured in both U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, and USA Today.
