This article first appeared on GuruFocus.
Micron Technology (MU, Financials) capped off a strong fiscal 2025 and says the new year is already shaping up to be even bigger. The memory maker posted $37.4 billion in revenue for the year, up nearly 50% from a year ago, and told investors it expects $12.5 billion in sales for the first quarter of fiscal 2026 the highest in its history.
CEO Sanjay Mehrotra credited artificial intelligence for driving the shift. Sales of Micron’s high-bandwidth memory and server DRAM have climbed more than fivefold to $10 billion as cloud providers and device makers race to add AI capacity. Tight supply in DRAM has also helped lift pricing and profitability.
In the latest quarter, Micron brought in $11.3 billion in revenue, up 46% from a year earlier, with earnings of $3.03 per share. Gross margin reached 41%, a big improvement from last year’s 24%.
Looking ahead, the company expects gross margin above 51% and earnings of about $3.75 per share in Q1. CFO Mark Murphy said free cash flow should grow in 2026, even with higher capital spending to expand DRAM and HBM production.
Micron is expanding its U.S. fab in Idaho with the help of CHIPS Act money, and it is also developing more capacity in Singapore. The business aims to start shipping its next-generation HBM4 in 2026, hoping that demand for AI will keep memory markets tight.
The most important concern for investors will be whether Micron can keep up its momentum and profits as it works to meet the growing demand for AI.