Micron Just Raised Its Buyback Authorization to $35 Billion. Prediction: It Spends More Buying Back Stock in the Next Year Than in the Past 8 Combined.

Micron Technology (NASDAQ:MU) hasn't been a heavy buyer of its own stock. From fiscal 2019, when the current repurchase program made its first purchases, through fiscal 2026, the memory chipmaker spent $7.84 billion on buybacks. It never spent over $2.66 billion in any one year.

But Micron's annual report, filed Oct. 9, says the board lifted the buyback authorization to $35.16 billion on Oct. 8. The new cap is over four times what the company spent in those eight fiscal years combined.

I expect Micron will top that eight-year total in the next 12 months. But the buyback might do less for the share count than a number this big suggests.

Image source: Micron.

One quarter's cash

The board's number comes almost entirely from a single quarter. The report says the total begins with the $2.16 billion left under Micron's earlier $10 billion authorization. Then it adds 100% of the last quarter's non-GAAP (adjusted) free cash flow after dividends, or around $33 billion.

Showing how unusual the quarter was, Micron's adjusted free cash flow (the cash left after capital spending) reached $33.2 billion in the fourth quarter of fiscal 2026 (the period ended Sept. 3, 2026). And it's been climbing fast, from $803 million a year earlier and $18.3 billion in fiscal Q3. For all of fiscal 2026, free cash flow totaled $62.3 billion -- up from $3.7 billion in fiscal 2025. In other words, eight years of buybacks now equal around 24% of the free cash flow Micron generated during one quarter.

Management expects even more. Micron's CFO, Mark Murphy, told analysts on the Sept. 30 earnings call that free cash flow this quarter should be significantly higher than in fiscal Q4.

He also said that the company has "the ability and the intent to increase our capital return."

The board raised the authorization eight days later.

What could stop it?

Of course, the authorization doesn't force Micron to buy any shares.

And the company's federal CHIPS Act funding agreements, which provide grants of up to $6.4 billion for its U.S. plants, put conditions on buybacks. For the first two years after the Dec. 9, 2024 award, repurchases are mainly limited to amounts meant to help offset employee stock awards. That seems to be why the bigger program begins on Dec. 9, 2026. For three years after that, repurchases face caps tied to free cash flow after grants and dividends.

Micron also hasn't bought much recently. It spent $300 million on buybacks in fiscal 2024, nothing in fiscal 2025, and $650 million in fiscal 2026.

Yes, artificial intelligence demand could soften, and a steep fall in memory prices could change the plan. But to pass its eight-year total, Micron has to use only around 22% of what the board just approved.

The share count may barely move

A record year of buybacks may not cut Micron's share count, though. Its average number of shares outstanding climbed from 1.105 billion in fiscal 2024 to 1.116 billion in fiscal 2025 and 1.127 billion in fiscal 2026, mainly due to employee stock awards. That comes out to around 11 million more shares each year.

With shares near $985 as of this writing, $7.84 billion buys around 8 million shares. Micron could match eight years of buyback spending in one year and still not offset a single year of that growth.

The reason is the stock price. In fiscal 2019, the program's peak year, $2.66 billion retired 67 million shares. The same money buys under 3 million shares now.

Even the full $35.16 billion works out to about 35 million shares -- roughly 3% of the 1.13 billion outstanding. Earlier this month, I estimated that Micron's excess cash could retire about 5% of its shares per year. Getting there would take another increase from the board.

Buying back stock at today's price still arguably makes sense. Micron earned $74.33 a share in fiscal 2026, up from $7.59 in fiscal 2025, and it expects around $38 a share this quarter alone. At about 13 times fiscal 2026 earnings, the shares don't look pricey given that forecast.

In the end, Micron should top its eight-year buyback total easily. But at today's share price, I doubt the buyback will do much for earnings per share anytime soon. The stock's next move likely still depends more on memory prices than on the buyback.

Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology. The Motley Fool has a disclosure policy.