Analyst(s): Futurum Research
Publication Date: December 18, 2025
Micron’s Q1 FY 2026 underscores accelerating AI data center demand, supply tightness across DRAM and NAND, and disciplined execution on pricing and mix. Management detailed a multi-year capacity expansion and product roadmap spanning HBM4, 1‑gamma DRAM, and G9 NAND, with visibility strengthened by long-term customer commitments.
What is Covered in this Article:
- Micron’s Q1 FY 2026 financial results
- Data center and HBM supply-demand dynamics
- DRAM pricing power and node roadmap
- NAND, client, and embedded momentum
- Guidance and Final Thoughts
The News: Micron Technology (Nasdaq: MU) reported Q1 FY 2026 results. Revenue reached a record high of $13.6 billion, up 57% year-on-year (YoY), versus Wall Street consensus of $13.0 billion. Segment revenue: Cloud Memory $5.3 billion (+100% YoY), Core Data Center $2.4 billion (+4% YoY), Mobile and Client $4.3 billion (+63% YoY), and Automotive and Embedded $1.7 billion (+49% YoY). Non-GAAP operating income was $6.4 billion (margin 47.0%) versus $2.4 billion (27.5%) YoY. Non-GAAP net income was $5.5 billion with diluted EPS of $4.78 versus $2.0 billion and $1.79 YoY.
“In Q1 FY 2025, Micron delivered record revenue and significant margin expansion at the company level and also in each of our business units. Our Q2 outlook reflects substantial records across revenue, gross margin, EPS, and free cash flow, and we anticipate our business performance to continue strengthening through FY 2026,” said Sanjay Mehrotra, Chairman, President & CEO.
Micron Technology Q1 FY 2026 Sets Records; Strong Q2 Outlook
Analyst Take: Micron’s setup for FY 2026 is characterized by AI-led demand, structurally tight supply, and a technology roadmap aligned to high-value memory. Management indicated that 2026 HBM supply is fully committed, with broader DRAM/NAND bit growth constrained by industry capacity through 2026. The company is pulling forward capacity investments while prioritizing HBM, 1‑gamma DRAM, and G9 NAND to optimize mix and margins. Multi-year customer agreements, improved quality metrics, and expanding global manufacturing underpin visibility and resilience. The result is a clearer path to sustained profitability as AI infrastructure spending broadens across data center, client, mobile, and automotive.
Data Center and HBM Supply-Demand Dynamics
AI data centers continue to drive step-function increases in high-bandwidth memory (HBM) and server DRAM content, with Micron’s entire calendar 2026 HBM supply under price and volume agreements. Management now forecasts HBM’s total addressable market (TAM) to grow from approximately $35 billion in 2025 to around $100 billion in 2028, pulled forward by two years. Tight DRAM supply is amplified by HBM’s trade ratio to DDR5 (roughly three-to-one, rising in future HBM generations), intensifying wafer allocation choices. HBM4, with pin speeds above 11 gigabits per second, is on track to ramp with high yields in the second calendar quarter of 2026, aligning with customer product plans. The combination of full HBM allocation, tight DRAM supply, and multi-year agreements increases pricing discipline and revenue visibility. These dynamics point to continued AI-centric growth with a favorable mix and margin.
DRAM Pricing Power and 1‑gamma/1‑delta Roadmap
Pricing improved across DRAM with approximately 20% sequential increases in Q1 FY 2026 amid tight inventories and constrained industry supply. Micron’s 1‑gamma DRAM is ramping well and will be the majority of DRAM bit output in the second half of calendar 2026, with 1‑delta and 1‑epsilon under development to extend leadership. The company is expanding low-power DRAM for servers, highlighting a 192‑gigabyte LP SOCAMM2 sample enabling over 50 terabytes per rack and roughly one-third the power of DDR-based modules. Server unit growth expectations were raised to high-teens percentage in calendar 2025, with continued strength anticipated in 2026. Tight DRAM conditions below target inventory days support ongoing pricing power across mainstream and AI-optimized parts. The roadmap and supply backdrop favor sustained DRAM margin leverage through FY 2026.
NAND, Client, and Embedded Momentum
Data center NAND revenue exceeded $1.0 billion in fiscal Q1, with momentum in performance SSDs and early PCIe Gen6 qualifications leveraging G9 NAND. In capacity storage, QLC-based 122‑terabyte and 245‑terabyte G9 SSDs entered qualification at multiple hyperscalers, expanding the addressable footprint for NAND in AI-era data platforms. PC demand is supported by Windows 10 end-of-life and AI PC adoption, with unit growth now expected to be high-single digits in calendar 2025, while supply tightness could modestly temper shipments in 2026. In mobile, flagship models with 12 gigabytes DRAM rose to 59% in calendar Q3 YoY, and Micron began sampling 1‑gamma LPDDR6 and 24‑gigabit LPDDR5X as content and performance climb. Automotive demand grows with L2+/L3 features and ASIL-rated LPDDR5X/UFS 4.1 design wins totaling several billions of dollars, while industrial demand strengthens across automation, robotics, and edge applications. Together, these vectors broaden growth beyond data center and enhance cycle durability.
Guidance and Final Thoughts
Management expects tight industry conditions to persist through and beyond calendar 2026, with calendar 2025 DRAM bit demand growth now in the low‑20% range and NAND in the high‑teens. For 2026, both DRAM and NAND industry bit shipments are expected to increase around 20% from 2025 levels but remain supply-constrained, with Micron targeting approximately 20% shipment growth. FY 2026 capital expenditures are now planned at approximately $20.0 billion (from $18.0 billion), prioritizing HBM capacity and 1‑gamma output, with global initiatives spanning the U.S. (Idaho, New York), Japan, Singapore (HBM advanced packaging in 2027), and India (assembly ramp in 2026). These actions aim to expand long-term supply while maintaining discipline and mix optimization. Given visibility into AI data center buildouts and multi-year customer commitments, Micron’s outlook indicates continued strengthening through FY 2026.
See the full press release on Micron Technology’s Q1 FY 2026 financial results on Micron Technology’s website.
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Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of Futurum as a whole.
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