Micron Says The Best Is Yet To Come After Record Q1

Core Viewpoint - Micron Technology, Inc. reported strong fiscal first-quarter 2026 results, exceeding expectations and providing an optimistic forecast for the upcoming quarter. Financial Performance - Micron's first-quarter revenue reached $13.64 billion, surpassing estimates, with adjusted earnings of $4.78 per share. Sales increased by 20.5% year-over-year, operating cash flow rose to $8.41 billion, and adjusted free cash flow was $3.9 billion [1][2]. - The company ended the quarter with $12 billion in cash, marketable investments, and restricted cash [3]. Future Projections - For fiscal second quarter, Micron projected revenue of $18.7 billion, plus or minus $400 million, significantly above analysts' estimates. Adjusted earnings are expected to be $8.42 per share, plus or minus 20 cents [4]. - The CEO emphasized that the second-quarter outlook includes record highs in revenue, gross margin, EPS, and free cash flow, with expectations for continued strengthening throughout fiscal 2026 [4]. Market Insights - Micron anticipates higher pricing, lower costs, and a more favorable product mix for the second quarter, which should enhance gross margin. The expected tax rate is about 15.5% for both the fiscal second quarter and fiscal 2026 [5]. - The high-bandwidth memory (HBM) market is projected to grow at approximately 40% annually through 2028, increasing from around $35 billion in 2025 to about $100 billion in 2028. DRAM bit demand is expected to grow in the low 20% range, while NAND bit demand is projected in the high teens [6]. Capital Expenditure and Expansion Plans - Micron plans to increase fiscal 2026 capital expenditures to about $20 billion. The company expects to produce its first wafers from the new Idaho fabrication facility in early 2027 and is targeting a second Idaho fab by 2028 [7]. Analyst Ratings and Price Forecasts - Following Micron's results, analysts reaffirmed bullish views and raised price forecasts. Needham's N. Quinn Bolton reiterated a Buy rating with a $300 price target, while Bank of America Securities upgraded Micron to Buy from Neutral, raising the price forecast to $300 from $250 [8]. - Other analysts also increased their price targets, with Mizuho's Vijay Rakesh raising his forecast to $290 from $270, and Rosenblatt's Kevin Cassidy lifting his target to $500 from $300 [9][10]. Stock Performance - Micron Technology shares rose by 14.48% to $258.17 during premarket trading, nearing its 52-week high of $264.75 [11].