Micron's AI Boom Lifts EPS 1,272% — But Market Doubts It Lasts

Micron Technology's earnings trajectory has become one of the market's most dramatic turnarounds: the company posted a negative $5.34 earnings per share in fiscal year 2023 and is estimated to deliver $73.23 EPS in fiscal year 2026—a shift so radical that investors are questioning whether the company has fundamentally escaped its historical boom-bust pattern. The catalyst has been high-bandwidth memory, chips that stack directly onto powerful AI processors such as NVIDIA's next-generation graphics processing units. These chips have become the key system bottleneck for training and deploying large language models, transforming Micron from a commodity DRAM and NAND supplier into an integral component of global AI hardware architecture.

The operational momentum has been undeniable. In Q3 fiscal 2026, Micron's revenue surpassed consensus projections of $35.69 billion（約5.7兆円）, and Wall Street research desks have adjusted average earnings projections upward by 794% over the last year—a striking revision of the company's long-term earning power. Management has revealed that the company's entire HBM production allocation for fiscal 2026 has already been sold out, with supply shortages expected to continue beyond 2027. More significantly, Micron has locked in multi-year supply agreements across the AI ecosystem totaling more than $100 billion（約16兆円） in minimum contracted revenue, with contractual price floors designed to maintain gross margins above 70%.

Despite this operational strength, the market remains deeply skeptical. Micron's stock trades at a forward price-to-earnings multiple of just 6.2x, a severe discount to its underlying profitability: the company currently posts a return on equity of 66.6% and gross margins of 84%. This valuation anomaly reflects the market's belief that Micron faces immediate mean reversion and cannot escape its cyclical past. That skepticism is not without historical foundation. During the last downturn, Micron's gross margin collapsed from 45.2% in 2022 to a mere 2.7% in 2023, demonstrating how rapidly semiconductor cycles can disintegrate when end-market demand falls or global capacity overshoots. High-profile short positions, notably Michael Burry's publicly stated bet against the stock, embody macro bears' conviction that capacity expansion will eventually swamp the market and trigger another major margin contraction—a fear that the multi-year supply agreements have not yet dispelled.

Micron's transformation from cyclical memory maker to AI infrastructure linchpin represents a genuine operational shift. The company now supplies high-bandwidth memory chips that serve as the critical bottleneck in training and deploying large language models—a role that has generated Wall Street consensus upgrades of 794% over the past year and locked in more than $100 billion（約16兆円） in multi-year contracted revenue with price-floor protections above 70% gross margin. Management's statement that supply shortages will likely continue beyond 2027 adds structural conviction to the earnings recovery.

Yet the market's valuation discount—a forward price-to-earnings multiple of just 6.2x despite 66.6% return on equity and 84% gross margins—reflects rational skepticism rooted in Micron's history. The company endured a catastrophic margin collapse from 45.2% in 2022 to 2.7% in 2023 when end-market demand fell, and high-profile short positions (including Michael Burry's publicly stated bet) reflect the persistent fear that capacity expansion will eventually swamp the market and trigger another contraction. The core question is whether the multi-year supply agreements and ongoing HBM shortage create genuine structural protection or merely delay the inevitable cyclical reset.

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