Micron Q3 FY2026 Earnings Preview: HBM4, Margins, and $1 Trillion Valuation

Upcoming Earnings Report

Micron Technology is set to report its fiscal third-quarter (Q3) 2026 results on June 24, after market close. Analysts are anticipating significant growth in revenue and margins.

Q2 FY2026 Review

In Q2 FY2026, Micron achieved record revenue of $23.9 billion, marking a 196% year-on-year growth. This was driven primarily by DRAM sales, which accounted for 79% of total revenue, with prices increasing significantly. The company faced a supply constraint, fulfilling only 50-66% of customer demand, which has bolstered its pricing power. Gross margins reached a record 74.9%, and the company reported an adjusted free cash flow of $6.9 billion.

Q3 FY2026 Preview

Consensus estimates project Q3 revenue to be around $35.59 billion, surpassing management's guidance. DRAM is expected to remain the main growth driver, contributing approximately 77% of total revenue. Analysts predict gross margins could reach 81.6%, which would be the highest in the company's history.

Key Questions for the Earnings Call

• What will be the revenue contribution from HBM4, and how is the supply for 2027 being managed?
• Can gross margins maintain above 80%, or have they peaked?
• When will supply begin to meet demand?
• Is the demand for AI memory compensating for weaknesses in PC and mobile units?
• Are non-HBM DRAM pricing dynamics being overlooked as a margin driver?

Analyst Sentiment

Analyst sentiment is overwhelmingly positive, with 25 out of 27 analysts rating Micron as a buy. The average 12-month price target is $1,246, indicating a modest upside from the current price. The stock has seen a significant rally, but the upcoming earnings report will be crucial in justifying its current valuation, which has surpassed $1 trillion.

Technical Analysis

Micron's stock has surged 285% since March, but has experienced volatility with sharp pullbacks. Currently, it trades above key moving averages, indicating a bullish trend. However, the relative strength index (RSI) suggests the stock may be overbought, indicating potential profit-taking could occur even with strong earnings results.