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Micron (MU) announced a significant upward revision to its Q4 guidance, reflecting robust demand and improving pricing dynamics in its DRAM portfolio. The company now expects EPS of $2.78-$2.92, up from the prior range of $2.35-$2.65, and revenue of $11.1-$11.3 bln, tightened and raised from $10.4-$11.0 bln. This adjustment is primarily driven by sustained strength in DRAM, particularly in high-bandwidth memory (HBM), fueled by escalating demand for AI and high-performance computing applications.

The updated guidance also reflects improved non-GAAP gross margins of 44.5%, +/- 0.5%, compared to the previous 42.0%, +/- 1.0%, signaling enhanced pricing power and operational efficiency. MU’s strategic focus on high-margin, AI-driven products and disciplined supply management underpins this optimistic outlook.

• This guidance follows MU’s strong Q3 earnings report on June 25, 2025, which showcased record DRAM revenue of $7.1 bln, up 51% yr/yr, including a nearly 50% sequential surge in HBM revenue, driven by booming data center demand. Despite this robust performance, MU’s stock experienced a nearly 7% decline since the Q3 report, partly due to investor concerns over potential tariff-related demand pull-ins, which could have inflated short-term orders.
• Today’s raised Q4 guidance should alleviate these concerns, as it indicates that customer orders remain aligned with sustained, organic demand rather than transient stockpiling, reinforcing confidence in MU’s market position and the durability of its growth trajectory.
• The standout driver of MU’s performance is its HBM3E chips, tailored for cutting-edge AI and high-performance computing workloads, which are commanding premium pricing due to their critical role in accelerating data-intensive applications. Key growth drivers for HBM3E include the exponential rise in AI model complexity, requiring greater memory bandwidth and density, and the increasing adoption of AI accelerators across data centers.
• MU’s HBM supply is fully booked for 2025, with robust demand extending into 2026, reflecting the company’s competitive edge in a market projected to reach $35 bln in 2025. To capitalize on this opportunity, MU has committed to investing over $200 bln over the next 20+ years in the U.S. to expand its HBM manufacturing and R&D capabilities, positioning it to capture a significant share of the growing AI infrastructure market.
• Beyond the data center, MU’s Q3 results highlighted broad-based strength across its consumer-oriented segments, particularly in PCs and smartphones. The Mobile Business Unit delivered a 45% sequential revenue increase to $1.6 bln, fueled by improving pricing conditions and rising demand for AI-enabled smartphones, which now require 12 to 16 GB of DRAM compared to 8 GB in last year’s flagship models.

MU’s re-raised Q4 guidance underscores the sustained strength in its DRAM portfolio, with HBM chips emerging as a pivotal growth engine. The surging demand for HBM3E positions MU to capitalize on the AI-driven memory market expansion. This momentum, coupled with strategic U.S. investments, makes MU a compelling player in the semiconductor space, with HBM poised to drive significant value creation into 2026 and beyond.