Forget the single-product story. Micron Technology is now selling a broader narrative: that physical limits on memory output are locking in pricing power and fuelling a record run in free cash flow. Speaking at the J.P. Morgan Technology Conference on 20 May, operations chief Manish Bhatia argued that supply constraints have become structural, not cyclical. Slower bit growth from new fabrication nodes, the chip-area penalty of larger HBM designs, and longer lead times for new factories mean the industry simply cannot flood the market as it once did.
The payoff is already visible in the numbers. In the second fiscal quarter, Micron posted revenue of $23.86 billion — a 196% surge from the $8.05 billion it reported a year earlier. Net income came in at $13.79 billion. Adjusted free cash flow hit $6.9 billion after net capex of $5.0 billion, and the company ended the period with $16.7 billion in cash, marketable securities and restricted funds. Bhatia flagged that the current third quarter is on track to deliver another clear record in free cash generation.
HBM4 Ramp Runs Twice as Fast
The high-bandwidth memory business remains the headline act. Mass production of HBM4 modules — offering 36 GB capacity and 2.8 TB/s bandwidth, designed for Nvidia’s “Vera Rubin” architecture — has begun. Bhatia confirmed the production ramp is moving at double the speed of its HBM3E predecessor. Every unit of HBM capacity for the remainder of calendar 2026 is already sold out. CEO Sanjay Mehrotra expects the market for AI infrastructure to expand from $35 billion in 2025 to $100 billion by 2028, and the company sees DRAM, NAND and HBM supply shortages persisting well beyond next year.
Yet Micron’s ambitions stretch beyond a single product line. The company is pushing its 1-gamma DRAM and Gen9 NAND nodes toward volume production, targeting a majority of bit output by mid-year. Yields are improving faster than with prior generations, Bhatia said, giving the firm an extra lever to boost efficiency across both DRAM and NAND.
A Balance Sheet Built for a Capital Splurge
“The balance sheet has never been stronger,” Bhatia said, pointing to upgrades from all three major rating agencies in the current fiscal year. That strength comes none too soon. Micron is planning gross capex of more than $25 billion for fiscal 2026, net of government subsidies, to build additional DRAM wafer capacity. In a normal cycle, such heavy spending would alarm investors, but in a supply-constrained market it is seen as a prerequisite for securing pricing power and market share.
Should investors sell immediately? Or is it worth buying Micron?
Wall Street is already pricing in the payoff. The stock closed recently at $762.10, with a daily high of $764.49 and volume of roughly 42.5 million shares, giving a market capitalisation of about $870.3 billion. The shares have gained more than 140% since the start of the year, a rally that reflects not just AI demand but the expectation that structural tightness will sustain high margins.
Analysts have responded accordingly. Citigroup raised its price target to $840, while Melius Research went further, setting a $1,100 target and citing “unprecedented” demand from AI investment. The stock added around 2% in pre-market trading after the conference comments.
Seoul Talent Hunt Targets Rivals
Micron is also spending aggressively on human capital. In Seoul, the company has posted job openings for HBM architects, explicitly courting engineers from Samsung and SK Hynix. Senior positions offer packages of up to 300 million won — roughly $214,000 including bonuses — as Micron seeks to build specialised expertise locally without forcing engineers to relocate.
The next test comes on 24 June, when Micron reports its official third-quarter results. By then the market will want to see whether the promised cash-flow record materialises and whether discipline on capacity expansion can hold amid the spending spree. If so, the current cycle momentum may prove more durable than past memory booms.
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