Micron reported robust Q3 2026 results with revenue of $41.5 billion, up 74% from the previous quarter and 346% year over year, and net income of $28.2 billion, topping analyst expectations.

Growth is being driven by high-bandwidth memory chips used in AI data center workloads, with demand described as insatiable and supply as constrained.

Micron has secured strategic customer agreements with 16 customers, laying out three- to five-year contracts and pricing bands to strengthen cash flow, margins, and financial stability, with management targeting at least half of revenue locked in under SCAs by term end.

Pricing power has sharpened across cloud memory, data center, and mobile segments, driving gross-margin improvements: cloud memory up 9 points to 83%, data center up 12 points to 87%, and mobile up 9 points to 87%.

Management raised its fiscal Q4 guidance to about $50 billion in revenue and $30.73 per share, signaling continued strong demand and upside versus consensus.

The overall outlook remains constructive for Micron: despite rapid gains, the company’s earnings power, backlog, and AI-driven demand for memory keep it attractive to investors.

Micron has presold its entire HBM production capacity through 2027 and expects tight conditions to persist beyond, underpinned by AI-driven demand and structural supply constraints.

The stock has surged roughly 229% year-to-date, underpinned by a strong backlog, pricing power, and a memory supercycle projected to last through at least 2028, with the stock trading around 21 times earnings and a low five-year PEG of 0.14.