Image source: Micron.
A $35 billion quarter
Micron’s net income was $13.8 billion in the fiscal second quarter of 2026. By the fiscal third quarter (the period ended May 28, 2026), it had hit $28.2 billion. And the new guide indicates a further jump of about 25% from that level, down from more than 100% sequential growth the previous quarter. The dollars keep growing even as the climb slows.
Price, not volume, is doing the work. Average selling prices for DRAM rose in the low-60% range from the quarter before, as reported in Micron’s most recent quarterly filing, while shipment volumes increased only a low-single-digit percentage. Micron’s gross margin, 37.7% in the prior-year quarter, reached 84.6% in the fiscal third quarter. Put another way, the company is selling only slightly more memory than it did the previous quarter, at far higher prices.
The company releases the quarter’s actual results on Sept. 30.
Microsoft’s fiscal 2027 is the real bar
The two companies different calendars. Microsoft’s fiscal 2027 started in July and runs through next June, while Micron’s fiscal 2027 began in early September and runs through about August of next year.
Four quarters at the guided pace would amount to about $141 billion. That would beat Microsoft’s fiscal 2026 — and it’s worth pointing out the $133.7 billion Microsoft reported included about $5 billion of gains on its OpenAI investment.
The real bar is higher, though. For one thing, the quarter Micron just guided has 14 weeks in it rather than the typical 13, because fiscal 2026 was a 53-week year. Account for the additional week, and the guided pace points to a figure closer to $131 billion over a normal 52-week year.
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NASDAQ: MSFT
Microsoft
Premium Feature
Moneyball Superscore
93/100
Today’s Change
(-0.80%) $-3.97
Current Price
$493.78
Key Data Points
Market Cap
$3.7TMarket cap calculated using publicly traded s outstanding only. Does not include unlisted, private, or dual-class non-traded s. Implied market cap may vary.
Day’s Range
$491.10 – $498.65
52wk Range
$349.20 – $553.72
Volume
39.6M
Avg Vol
34.1M
Gross Margin
67.94%
Dividend Yield
0.74%
And Microsoft won’t stand still. Even if the technology company‘s profit growth slows to half of last year’s 31% rate, its fiscal 2027 could still come in around $154 billion.
Put those together, and Micron has to average about $38 billion to $39 billion of net income a quarter over fiscal 2027, around 10% more than the guided quarter, with one fewer week to do it in.
Can memory prices hold?
Micron can clear that bar without memory prices surging further. But it does need them to hold somewhere close to record levels while it sells more bits. The company is investing heavily to expand supply, and it’s been signing multi-year take-or-pay agreements that bind customers to buying set volumes.
“We believe our multi-year Strategic Customer Agreements will significantly enhance the durability and predictability of Micron’s strong financial performance,” said CEO Sanjay Mehrotra in the company’s fiscal third-quarter earnings release.
To be sure, memory prices have moved the other way before. As recently as fiscal 2023, a supply glut cut Micron’s revenue almost in half, to $15.5 billion, and produced a $5.8 billion net loss. Even a small pullback in prices could put the whole call out of reach.
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NASDAQ: MU
Micron Technology
Premium Feature
Moneyball Superscore
92/100
Today’s Change
(3.92%) $38.30
Current Price
$1,015.80
Key Data Points
Market Cap
$1.1TMarket cap calculated using publicly traded s outstanding only. Does not include unlisted, private, or dual-class non-traded s. Implied market cap may vary.
Day’s Range
$977.83 – $1016.44
52wk Range
$154.65 – $1255.00
Volume
35.8M
Avg Vol
39.1M
Gross Margin
72.60%
Dividend Yield
0.05%
Memory prices are not the only factor to monitor. Unions that represent most of Micron’s employees in Taiwan, its biggest manufacturing center, have been pushing for a profit-sharing plan and keeping strike preparations alive, Reuters reported in mid-September. No strike has been called, and production has not been affected.
Even so, I think the situation favors Micron here. Prices don’t need to rise further. But they do need to avoid collapsing — and Micron’s latest quarterly filing says most of these agreements set fixed or floor-and-ceiling prices, which would cushion the company if they did.
Will Micron out-earn Microsoft in fiscal 2027? I believe it will, by a slim margin — so long as memory prices hold.
In the end, this is a profit ranking, not a stock call. Microsoft is worth about three and a half times what Micron is worth, and memory profits have historically been the less durable kind.
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About the Author
Daniel Sparks is a contributing Motley Fool stock market analyst covering technology, industrials, financials, and consumer goods. Daniel is the owner and chief investment officer of Sparks Capital Management. He holds a master’s degree in business administration from Colorado State University. The Globe and Mail profiled him and his investing philosophy in an article titled, “This stock picker is outperforming nearly everybody else. Here’s how he is doing it.”
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