Micron Technology Inc. reported its second-quarter results for fiscal 2026 on Wednesday, delivering a performance that shattered Wall Street expectations. Driven by an increased demand for AI-specific memory, the company’s revenue nearly tripled year-over-year, to $23.86 billion. Despite record-breaking earnings, Micron’s stock (MU) has failed to gain momentum in extended trading. Alongside persistent concerns over inflation, the company’s massive increase in Capital Expenditure (CapEx) has caused concerns among investors.
Crushing the Consensus Forecast
While analysts had already adjusted their expectations upward, Micron still managed to outperform the market. The company reported a staggering $23.86 billion in revenue for the second quarter of fiscal 2026, easily surpassing the prediction of ~$19.2-$20.2 billion. This represents a 196% surge compared to the $8.05 billion reported during the same period last year. Profitability also surged, with non-GAAP EPS reaching $12.20 and significantly beating the projected range of $8.61 to $9.33. This marks a 682% increase from the $1.56 EPS recorded in the prior-year quarter.
Perhaps most shocking to analysts was Micron’s forward-looking guidance; the company is projecting $33.5 billion in revenue for the third quarter, a figure that nearly doubles previous market forecasts and would set yet another record. Micron’s CEO Sanjay Mehrotra noted, “Our fiscal Q3 single-quarter revenue guidance exceeds the full-year revenue for every year in our company’s history through fiscal 2024. For fiscal Q3, we anticipate exceptional growth across revenue, gross margin, EPS, and free cash flow.”
Funding the Future
By aiming for a quarterly revenue that exceeds the full-year revenue through fiscal 2024, Micron is signaling unprecedented scale. The company is projecting Q3 capital expenditures of approximately $7 billion, with the total for fiscal 2026 now expected to exceed $25 billion.
During the conference call, CEO Sanjay Mehrotra clarified the necessity of this spending: “We expect fiscal 2026 CapEx to be above $25 billion. From our last earnings call estimate, the majority of the increase is driven by cleanroom facility-related CapEx, of which the largest factor is Tongluo, followed by construction spend increase in our U.S. fab projects.”
He further shared his ambitions for the next fiscal year as well, “We project our fiscal 2027 CapEx to step up meaningfully to support HBM and DRAM-related investments. We expect construction-related CapEx to increase by over $10 billion year over year in fiscal 2027 as we build out our global manufacturing sites to address long-term demand opportunities. In addition, we expect higher equipment spend year over year in fiscal 2027.”
While these investments secure Micron’s role in the AI infrastructure, the sheer scale of spending has led to the stock (MU) struggling to maintain the momentum despite an impressive earnings report.
The Tug-of-War Between Growth and Risk
Despite these historic results, the market’s immediate reaction remained relatively flat, with Micron’s stock (MU) struggling to find upward momentum in the wake of the report. While the $23.86 billion revenue was a triumph, the company’s aggressive spending plans have caused caution among investors.
A massive hike in capital expenditure to meet the insatiable demand for AI infrastructure comes at a time when persistent inflation is significantly raising the cost of global manufacturing. As Wall Street weighs the long-term potential of the AI supercycle against the short-term pressure of these massive investments, Micron remains focused on its strategic expansion.
