Micron Technology Stock Soars 9% on Q1 Earnings Beat, Strong Guidance

Micron Technology, Inc. MU shares gained 9.3% during Wednesday’s extended trading session after the memory chip maker reported better-than-expected first-quarter fiscal 2026 results and provided strong guidance for the second quarter.

Micron Technology reported first-quarter earnings of $4.78 per share, beating the Zacks Consensus Estimate by 22.25%. The company’s first-quarter earnings jumped 167% year over year from the year-ago quarter’s earnings of $1.79 per share.

Micron Technology’s revenues increased 56.7% year over year to $13.64 billion and surpassed the Zacks Consensus Estimate by 7.26%. The top line was driven by robust demand for its high bandwidth memory (HBM) products.

Buoyed by better-than-expected financial performance, Micron Technology issued strong guidance for the second quarter of fiscal 2026. The company’s forecast for the top and bottom lines was above the Zacks Consensus Estimate.

Micron Technology’s Q1 Top-Line Details

Technology-wise, DRAM revenues of $10.8 billion, accounting for 79% of the total revenues in the fiscal first quarter, increased 69% year over year and 20% sequentially. The company experienced record demand for data center DRAM, driven by strong growth in HBM and robust performance of high-capacity DIMMs and low-power server DRAM products.

NAND revenues of $2.7 billion, representing 20% of the total revenues, were up 22% year over year as well as sequentially.

Other revenues were $88 million in the reported quarter, which increased from $68 million in the year-ago quarter and was up from $79 million in the previous quarter.

Previously, Micron used to report its business segments as follows: Compute and Networking Business Unit, Mobile Business Unit, Embedded Business Unit and Storage Business Unit. Following the reorganization, its disclosure of business segments is as follows: Cloud Memory Business Unit, Core Data Business Unit, Mobile and Client Business Unit and Auto and Embedded Business Unit.

Business segment-wise, revenues of $5.28 billion from the Cloud Memory Business Unit soared 100% from the year-ago quarter and 16% sequentially, driven by an increase in bit shipment and higher pricing.

Revenues of $2.38 billion from the Core Data Business Unit grew 4% on a year-over-year basis and increased 51% on a quarter-over-quarter basis due to higher pricing and an increase in bit shipments.

The Mobile and Client Business Unit’s revenues were $4.26 billion, up 63% from the year-ago period and up 13% from the previous quarter. Revenues from the Auto and Embedded Business Unit totaled $1.72 billion, which increased 49% year over year and 20% sequentially.

Micron Technology’s Q1 Operating Details

For the fiscal first quarter, MU posted a non-GAAP gross profit of $7.75 billion, up 125 year over year and 50% sequentially. The fiscal first-quarter non-GAAP gross margin of 56.8% improved from the year-ago quarter’s 39.5% and the previous quarter’s 45.7%.

Non-GAAP operating expenses were $1.33 billion compared with the previous quarter’s $1.21 billion and the year-ago quarter’s $1.05 billion.

Micron Technology’s non-GAAP operating income of $6.42 billion was higher than the previous quarter’s non-GAAP operating income of $3.96 billion. It also shows significant improvements from the year-ago quarter’s non-GAAP operating income of $2.39 billion.

The non-GAAP operating margin came in at 47%. Micron Technology posted a non-GAAP operating margin of 35% for the previous quarter, and it had a non-GAAP operating margin of 27.5% in the year-ago quarter.

Micron Technology’s Balance Sheet & Cash Flow

MU exited the reported quarter with cash and investments of $12.02 billion compared with $11.94 billion at the end of the previous quarter. Its total debt, as of Nov. 27, 2025, was $11.19 billion compared with the $14.02 billion witnessed at the end of the previous quarter.

The company generated an operating cash flow of $8.4 billion in the fiscal first quarter. It spent $4.5 billion on capital expenditure in the quarter, resulting in an adjusted free cash flow of $3.9 billion. MU paid out $134 million in dividends and repurchased shares worth $300 million in the first quarter of fiscal 2026.

Micron Technology’s Q2 FY26 Outlook

MU provided its guidance for the second quarter of fiscal 2026. The company anticipates revenues of $18.7 billion (+/-$400 million) in the fiscal second quarter. The Zacks Consensus Estimate is pinned at $13.74 billion.

For the fiscal second quarter, Micron Technology projects a non-GAAP gross margin of 68% (+/-100 basis points). Operating expenses on a non-GAAP basis are estimated to be $1.38 billion (+/-$20 million).

Adjusted EPS is anticipated to be $8.42 (+/- 20 cents). The consensus mark is pegged at a loss of $4.47 per share.

MU’s Zacks Rank and Other Stocks to Consider

Currently, Micron Technology sports a Zacks Rank #1 (Strong Buy).

Marvell Technology MRVL, NVIDIA Corporation NVDA and Lumentum LITE are some other top-ranked stocks that investors can consider from the broader Zacks Computer and Technology sector. Marvell Technology, NVIDIA and Lumentum each sports a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Marvell Technology’s fiscal 2026 earnings has been revised upward by a penny to $2.84 per share over the past 30 days and suggests a year-over-year increase of 80.9%. Marvell Technology shares have risen 9% over the past six months.

The Zacks Consensus Estimate for NVIDIA’s fiscal 2026 earnings has been revised upward by 2 cents to $4.64 per share in the past seven days, calling for a year-over-year rise of 55.2%. NVIDIA shares have soared 17.5% in the trailing six months.

The Zacks Consensus Estimate for Lumentum’s fiscal 2026 earnings has moved northward by 10.4% to $5.42 per share over the past 60 days and implies a year-over-year increase of 163.1%. Lumentum shares have jumped 262% over the past six months.

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This article originally published on Zacks Investment Research (zacks.com).

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