Stock of the Week: Micron Technology at the Golden Moment of the Memory Cycle

Source Domain: www.xtb.com

Micron Technology announced record results for the second quarter of fiscal 2026, surpassing market expectations by double-digit figures and confirming that the AI-driven memory supercycle is entering an unprecedented profitability phase. Despite the fundamentally euphoric reception of the results, the company’s shares fell five to seven percent after the session due to concerns over higher capital expenditures, representing a classic “sell the news” scenario that does not alter the long-term growth trajectory.

Key Financial Results Q2 FY2026:

Revenue: USD 23.86 billion (+75% q/q, +196% y/y; market consensus USD 19 billion)
Net Income: USD 14.02 billion
EPS: USD 12.20
Gross Margin: 74.4%
Operating Cash Flow: USD 11.90 billion

Such a spectacular beat of estimates is no accident. Micron is fully leveraging sold-out HBM and server DRAM inventories, where hyperscaler demand significantly exceeds supply. Margins have returned to historical cycle highs, and strong operating leverage has translated revenue growth into exponential profit gains.

Segment Growth Breakdown

Q2 FY2026 results demonstrate that Micron’s growth is primarily driven by cloud and AI-related segments, which have become the foundation of the memory supercycle.

Cloud Memory Business Unit: Revenue reached USD 7.75 billion with an operating margin of 66%, driven by strong demand for HBM3E and HBM4 for AI accelerators. The backlog for the current fiscal year is effectively sold out, providing exceptional revenue visibility for upcoming quarters.
Core Data Center Business Unit: Revenue totaled USD 5.69 billion, a 139% q/q increase, with an operating margin of 62%. This segment primarily serves server DRAM for hyperscalers and data centers investing in AI infrastructure.
Mobile & Client Business Unit: Generated USD 7.71 billion in revenue with a 76% operating margin, reflecting a recovery in…