Micron's Tightrope Walk: Record Margins, a 63% DRAM Price Hike, and the $25 Billion Bet to End the Shortage
Published on 05/12/2026 at 10:16 | Redaktion boerse-global.de
The numbers are almost too stark to ignore. Contract prices for standard DRAM memory are set to leap another 63% in the second quarter of 2026, following a staggering 90% jump in the prior period, according to TrendForce. Across DRAM, NAND flash, and HBM, the market is running a supply deficit of roughly 5% — the widest gap since 2011. No wonder Micron Technology has seen its stock more than double in 2026 alone, adding over 144% to trade at €656.50, while the twelve-month gain exceeds 710%.
The sting is being felt deep inside the balance sheets of the biggest tech spenders. Alphabet, Amazon, and Microsoft have collectively hiked their 2026 capital expenditure budgets to between $185 billion and $200 billion. Meta’s Mark Zuckerberg explicitly blamed surging memory costs for the revision. For Micron, that pricing power is the engine behind a historic financial turnaround.
Micron’s fiscal second quarter — which ended in February 2026 — delivered revenue of $23.86 billion, up 196% year-over-year, and adjusted earnings per share of $12.20, which beat consensus by roughly 39%. The company is now guiding for fiscal third-quarter revenue of approximately $33.5 billion and a gross margin near 81%. To put that into perspective: a single quarter would generate more top-line dollars than Micron’s entire annual revenue for any fiscal year through 2024. All available high-bandwidth memory (HBM) production for calendar 2026 has already been contractually committed, with fixed prices and volumes locked in.
Should investors sell immediately? Or is it worth buying Micron?
The crown jewel is HBM4, which Micron is already mass-producing for Nvidia’s Vera-Rubin platform. The company plans to quickly ramp output to 15,000 wafers per month, exploiting margins that dwarf those of standard DRAM. The next-generation HBM4e is slated for a 2027 introduction.
To keep the pipeline moving, Micron has earmarked over $25 billion in capital spending for new fabrication facilities in Idaho, New York, Taiwan, and Singapore. But even that firepower won’t relieve the crunch soon: meaningful capacity from those plants isn’t expected until fiscal 2028 at the earliest. Sumit Sadana, Micron’s chief business officer, has stressed that supply will remain insufficient for the foreseeable future.
That scarcity is a double-edged sword. Micron’s stock now trades at a forward price-to-earnings ratio of roughly 37 — historically elevated — and its relative strength index has climbed near 78, a classic overbought signal. Any sudden softening in memory pricing or a pullback in hyperscaler investment could trigger a sharp correction. The next big test comes in midsummer, when the cloud giants report quarterly results and provide fresh updates on their spending plans. Meanwhile, Micron’s own appearance at J.P. Morgan’s technology conference on May 20 will be closely watched for any signs of a shift in HBM allocation or pricing discipline.
For now, the semiconductor sector is barreling toward an annual turnover exceeding $1 trillion in 2026, and Micron is sitting at the bottleneck itself. The question is not whether demand will hold — it’s how long the company can maintain software-like margins before the supply catch-up begins.
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Micron Stock: New Analysis - 12 May
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