Why Is Micron (MU) Up 22.7% Since Last Earnings Report?

Core Insights - Micron's shares have increased by approximately 22.7% since the last earnings report, outperforming the S&P 500 [1][2] Financial Performance - Micron reported Q4 fiscal 2025 earnings of $3.03 per share, exceeding the Zacks Consensus Estimate by 5.9%, with a year-over-year earnings increase of 156.8% from $1.18 per share [3] - Revenues for the fourth quarter rose 46% year over year to $11.32 billion, surpassing the Zacks Consensus Estimate by 1.2%, driven by strong demand for high bandwidth memory (HBM) products [3] Revenue Breakdown - DRAM revenues reached $8.98 billion, accounting for 79.4% of total revenues, marking a 68.7% year-over-year increase and a 27% sequential increase [4] - NAND revenues were $2.3 billion, representing 19.9% of total revenues, down 4.8% year over year but up 5% quarter over quarter [5] - The Cloud Memory Business Unit generated $4.54 billion in revenues, soaring 214% year over year and 34% sequentially [6] - The Core Data Business Unit's revenues were $1.57 billion, down 23% year over year but up 3% quarter over quarter [7] - Revenues from the Mobile and Client Business Unit totaled $3.76 billion, up 25% year over year and 16% sequentially [7] - The Auto and Embedded Business Unit reported revenues of $1.43 billion, increasing 17% year over year and 27% sequentially [7] Profitability Metrics - Micron's non-GAAP gross profit for Q4 was $5.17 billion, up from $2.83 billion year over year, with a non-GAAP gross margin of 45.7%, improving from 36.5% in the previous year [8] - Non-GAAP operating income was $3.955 billion, significantly higher than $1.745 billion in the year-ago quarter, with a non-GAAP operating margin of 35% [10] Balance Sheet and Cash Flow - At the end of Q4, Micron had cash and investments of $11.9 billion, up from $10.81 billion in the prior quarter, and total debt decreased to $14.02 billion from $15 billion [11] - The company generated an operating cash flow of $5.73 billion and reported an adjusted free cash flow of $803 million after capital expenditures of $4.93 billion [12] Future Outlook - For Q1 fiscal 2026, Micron anticipates revenues of $12.5 billion (+/-$300 million) and a non-GAAP gross margin of 51.5% (+/-100 basis points) [13] - The consensus estimate for Micron has shifted upward by 21.21% since the earnings release, indicating positive investor sentiment [14] - Micron holds a Zacks Rank 1 (Strong Buy), suggesting expectations for above-average returns in the coming months [16]