Key Takeaways
- Pre-market trading saw Micron shares decline over 4% following exceptional Q2 performance, delivering EPS of $12.20 against analyst predictions of $9.31 and revenue of $23.86 billion versus $20.07 billion forecasted.
- The company announced a $5 billion expansion to its fiscal 2026 capital expenditure plan, pushing total spending beyond $25 billion, triggering concerns among investors about market cycle timing.
- The company’s Q3 revenue projection reached $33.5 billion — representing more than a tripling from the prior year’s $9.3 billion — substantially exceeding Wall Street’s $24.29 billion forecast.
- Major fabrication facilities are under development in Idaho and New York, with Idaho operations scheduled to begin by mid-2027 and New York wafer manufacturing targeted for late 2028.
- GAAP gross margin expanded to 74.4% from the prior year, more than doubling, while net income surged to $13.8 billion compared to $1.58 billion twelve months earlier.
Wednesday brought one of Micron’s most impressive quarterly performances on record, yet shares declined anyway. This reflects typical market behavior.
The memory chipmaker exceeded expectations across all metrics. Adjusted earnings per share reached $12.20 compared to the $9.31 forecast. Revenue totaled $23.86 billion, surpassing the $20.07 billion consensus estimate. Net income climbed to $13.8 billion from $1.58 billion in the comparable period last year, while gross margins expanded to 74.4%, representing more than a doubling.
The Q3 outlook proved even more remarkable. Micron projected revenue of $33.5 billion — compared to analyst expectations of merely $24.29 billion. Adjusted earnings per share guidance came in at $19.15, far exceeding Wall Street’s $12.05 projection.
Artificial intelligence fuels these results. Hyperscalers continue investing heavily in data center infrastructure, creating explosive demand for high-bandwidth memory (HBM). Micron stands among only three global manufacturers of this technology, alongside Samsung and SK Hynix.
CEO Sanjay Mehrotra reported that volume production of HBM4 for Nvidia’s Vera Rubin GPU commenced during the fiscal first quarter. The company’s next-generation HBM4e products remain on schedule for 2027 ramping, with custom HBM designated for Nvidia’s Feynman chip targeted for 2028 delivery.
Shares still fell more than 4% in pre-market trading Thursday despite these figures. The earnings weren’t the problem — capital expenditure plans were.
Capital Spending Announcement Shakes Confidence
Micron revealed plans to expand its fiscal 2026 capital expenditure budget by $5 billion, elevating total investment for the year above $25 billion. The company also indicated that capex will increase further in 2027, with construction expenses alone projected to rise more than $10 billion compared to 2026 levels.
Mike O’Rourke, chief market strategist at JonesTrading, characterized the market reaction directly: “Investors wager that these are peak earnings and will be unsustainable.” He noted that the elevated spending reinforces concerns that the current memory shortage represents a temporary condition, and that margins will face compression once new capacity becomes operational.
Samsung declined 3.84% and SK Hynix fell 4.07% in Seoul trading Thursday. Memory-related U.S. companies including Western Digital, Seagate, and Sandisk also experienced declines ranging from 2% to 4% during premarket activity.
Expanding U.S. Manufacturing Footprint
Two significant U.S. fabrication facilities are currently under construction by Micron. The Idaho location is scheduled to begin initial manufacturing operations by mid-2027. The New York campus — representing a $100 billion investment that commenced construction in January — aims to achieve wafer production during the second half of 2028.
Cloud memory revenue expanded more than 160% to reach $7.75 billion during the quarter. Mobile and client revenue jumped to $7.71 billion from $2.24 billion in the year-ago period.
Micron’s shares have advanced more than 61% during 2026, following a surge exceeding 240% throughout 2025.
Among the ten highest-valued U.S. technology companies, Micron stands alone with positive year-to-date returns in 2026.
