Micron margins surge as memory shortage lifts chipmaker above Nvidia and Meta

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Micron margins surge above peers

Highlights

Micron's gross margin jumps to a record 84.9% in the latest quarter, up from 74.9% prior period and 39% a year earlier, driven by tight memory supply.
Quarterly revenue soars to $41.46 billion and net income hits $28.24 billion, each more than doubling compared to previous highs as higher memory prices boost results.
Micron signs long-term customer agreements with price floors supporting margins above past cycle peaks, projects 86% gross margin next quarter, and expects tight supply to persist beyond 2027.

Record profitability driven by tight memory supply

As reported by CNBC, Micron says its gross margin climbs to 84.9% in its latest earnings report, up from 74.9% in the prior period and 39% a year earlier, as customers absorb higher memory prices in an increasingly tight market.

Chief Financial Officer Mark Murphy says on the earnings call that fiscal third-quarter gross margin more than doubles from a year earlier and sets a new company record. The company also says revenue reaches $41.46 billion in the quarter, up by more than $20 billion from the prior period, while net income rises to $28.24 billion, more than 100% above the previous high set last quarter.

Micron says it is signing long-term strategic customer agreements at price levels designed to preserve elevated margins, marking a shift for an industry that usually relies on shorter-term supply arrangements. Chief Executive Sanjay Mehrotra says agreements with price bands include floor prices that support gross margins well above the company’s peak quarterly margins in any past cycle.

Broader cost pressure across U.S. tech

Micron’s margin now exceeds the latest quarterly gross margins reported by Meta at 81.9% and Nvidia at 75%, highlighting how memory has become a critical pricing bottleneck in the AI supply chain. Nvidia, Advanced Micro Devices and Google all rely on Micron’s high-bandwidth memory for AI systems, while Apple and other consumer device makers are also facing higher component costs.

Apple Chief Executive Tim Cook told the Wall Street Journal in an interview published last week that the iPhone maker is going to raise prices to address what he calls an unsustainable memory situation. Across large-cap U.S. tech, Micron rival Sandisk is the next-closest company on margin, after reporting in late April that quarterly gross margin rises to 78.4% from 51.1% in the prior period.

For investors, Micron signals that the current market conditions are likely to persist. The company projects gross margin of roughly 86% for the fiscal fourth quarter, and Murphy says Micron expects the market to remain tight beyond 2027, while Susquehanna analyst Mehdi Hosseini says customers have little choice but to keep paying a premium.

In our earlier coverage of Micron’s AI-driven memory squeeze, we explained how surging demand was tightening supply and lifting prices across data center and device markets. That report highlighted Micron’s fiscal Q3 blowout—revenue jumping to $41.46 billion with gross margin at 84.9%—along with guidance for roughly $50 billion in Q4 revenue and expectations that tight conditions could persist beyond 2027, supported by multi-year customer agreements.

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