Supply Crunch, Record Profits, Profit Focus: Micron’s Q4 Earnings Defy the Memory Cycle

TradingKey - Micron Technology (MU), the sole U.S.-based memory chipmaker, delivered a stunning Q4 FY2025 earnings report and issued first-quarter FY2026 guidance far above market expectations. Fueled by AI and data center demand, High Bandwidth Memory (HBM) products are in severe shortage, and Micron is challenging the traditional memory cycle with seven consecutive profitable quarters.

On Tuesday, September 23, after U.S. markets closed, Micron, one of the world’s largest memory chip manufacturers, reported its financial results for the fourth quarter of fiscal year 2025, ended August 29. The company posted:

• Revenue: $11.32 billion, up 46% YoY
• This exceeded both its raised guidance range of $11.1–$11.3 billion and the consensus forecast of $11.15 billion

Micron’s quarterly revenue set another all-time high, surpassing its previous record from Q3. For the full FY2025, revenue surged 49% to $37.4 billion, also a record annual figure.

Earnings per share (EPS) continued explosive growth, rising 156.8% YoY to $3.03, above the expected $2.86 and the company’s own guidance of $2.78–$2.92. Adjusted gross margin improved to 45.7%, up from 39% in Q3 and above the guided range of 44%–45%.

Last month, Micron cited improving DRAM pricing conditions and operational efficiencies as key drivers behind its upward revisions to revenue and profit forecasts.

AI-Fueled Data Center Demand Soars

Sanjay Mehrotra, CEO of Micron, said the company’s data center business achieved an all-time high in FY2025 and will enter FY2026 with strong momentum and its most competitive product portfolio to date. As the only major U.S. memory manufacturer, Micron holds a unique advantage in capturing future AI opportunities.

The company emphasized that memory chip supply will remain tight into next year, with data center demand already straining its ability to fulfill orders.

For Q1 FY2026, Micron expects:

• Revenue: $12.2–$12.8 billion, well above the analyst consensus of $11.9 billion
• EPS: $3.60–$3.90, significantly higher than the expected $3.05

Breaking the Memory Cycle

Micron has now achieved seven consecutive profitable quarters — notable because the traditional DRAM memory cycle typically lasts six to eight quarters, often marked by sharp downturns. 

If this trend continues, Micron could extend the profitability window, proving that AI is reshaping the cyclical nature of the memory market.

Company executives stressed that their focus remains firmly on maximizing profitability, a goal prioritized over market share expansion. Beyond data centers, Micron noted growing memory demand from PCs and smartphones — sectors that had previously lagged but are now recovering.

Before the earnings release, Synovus Trust highlighted that the guidance would be the key focus, and any upside surprise could trigger a broad positive reaction.

However, despite initial gains of about 5% in after-hours trading, Micron’s stock pared back most of its rally to less than 1%, reflecting investor caution toward a stock that has nearly doubled this year. Many still view it as a classic cyclical play.

According to TradingKey, the Wall Street consensus target price for Micron is $156.479, implying a 5% downside from current levels.