Sometimes a company has a great quarter. And sometimes a company has a great quarter and then tells you the next one will be even better. Micron Technology, Inc. (MU) falls squarely in the latter category, and investors rewarded the memory chip maker accordingly.
Micron's fiscal first-quarter 2026 results topped expectations across the board. Revenue came in at $13.64 billion, adjusted earnings hit $4.78 per share, and the year-over-year sales growth of 20.5% showed momentum building. Operating cash flow reached $8.41 billion, while adjusted free cash flow was $3.9 billion. Not bad for what the company is calling just the beginning.
"In fiscal Q1, Micron delivered record revenue and significant margin expansion at the company level and also in each of our business units," CEO Sanjay Mehrotra said.
The company closed the quarter holding $12 billion in cash, marketable investments, and restricted cash. Micron's board also approved a quarterly dividend of 11.5 cents per share, payable January 14, 2026, to shareholders of record as of December 29.
The Guidance That Got Everyone Excited
Here's where things get interesting. For the fiscal second quarter, Micron projected revenue of $18.7 billion, give or take $400 million. That's substantially above what analysts had penciled in. Adjusted earnings guidance came in at $8.42 per share, plus or minus 20 cents.
But Mehrotra didn't stop there. He emphasized that the second-quarter outlook includes record highs in revenue, gross margin, earnings per share, and free cash flow. He also made clear that Micron expects business performance to keep strengthening throughout fiscal 2026.
The Drivers Behind the Optimism
During the earnings call, management laid out the mechanics behind the rosy forecast. For the second quarter, Micron anticipates higher pricing, lower costs, and a more favorable product mix, all of which should expand gross margin. The company expects a tax rate of approximately 15.5% for both the fiscal second quarter and full fiscal 2026.
The real growth story centers on high-bandwidth memory. Micron expects the HBM market to grow at roughly 40% annually through 2028, jumping from about $35 billion in 2025 to around $100 billion in 2028. That's the kind of market expansion that makes chip executives giddy.
Management also shared broader demand expectations. In calendar 2025, DRAM bit demand should grow in the low 20% range and NAND bit demand in the high teens. Meanwhile, industry supply is expected to remain below demand for the foreseeable future, which is music to the ears of any company selling memory chips.
Big Plans, Bigger Spending
Micron isn't just riding the wave—it's building capacity to catch the next one. The company plans to raise fiscal 2026 capital expenditures to about $20 billion.
Here's the expansion timeline: Micron expects to produce its first wafers from the new Idaho fabrication facility in early 2027, with a second Idaho fab targeted for 2028. Construction on its New York fab should begin in 2026, with operations expected to start by 2030. It's a multi-year buildout designed to meet what management sees as sustained strong demand.
Wall Street Weighs In
Analysts responded to the results with a flurry of upgrades and raised price targets. Needham's N. Quinn Bolton reiterated a Buy rating with a $300 price forecast.
Bank of America Securities analyst Vivek Arya upgraded Micron to Buy from Neutral and raised his price forecast to $300 from $250.
Mizuho's Vijay Rakesh maintained an Outperform rating and increased his price forecast to $290 from $270. Rosenblatt's Kevin Cassidy kept his Buy rating but made the boldest move, sharply lifting his price forecast to $500 from $300.
The positive sentiment extended across the Street. Morgan Stanley's Joseph Moore maintained an Overweight rating and raised his price forecast to $350 from $338.
Raymond James analyst Melissa Fairbanks kept an Outperform stance and boosted her price forecast to $310 from $190. Piper Sandler's Harsh Kumar also maintained an Overweight rating, lifting his price forecast to $275 from $200.
MU Price Action: Micron Technology shares jumped 14.48% to $258.17 during premarket trading on Wednesday, approaching the stock's 52-week high of $264.75.