Micron’s fiscal Q4 ended in early September; results are due Sept. 30. June guidance projected $50 billion in revenue, plus or minus $1 billion, and an 86% gross margin. Past margin peaks were followed by steep declines within about a year.
Micron’s fiscal Q3, ended May 28, had an 84.6% gross margin, up from 74.4% the previous quarter and 37.7% a year earlier. The company attributed the surge to AI data-center demand growing faster than supply. Previous peaks were 61% in fiscal 2018 and 47.3% in 2021; margins later fell to 28.6% about a year after the first peak and to negative 32.7% four quarters after the second.
Micron has signed 16 customer deals lasting three to five years, mostly take-or-pay with fixed prices or price floors and ceilings. CEO Sanjay Mehrotra said floors alone enable margins above prior cycle peaks, but no downturn has tested the floors; CFO Mark Murphy said Q4 guidance reflects a meaningful slowdown in the pace of price increases. Mehrotra expects supply to improve gradually in 2028. The author treats 86% as a cycle peak, citing consensus FY2027 EPS of about $158 and a share price near $1,070, or roughly seven times forward earnings.
