Why You Should Think About Micron Differently Now
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Micron Technology (MU) stock trades at 10.8 times its earnings over the past twelve months, against 21.9 for the S&P 500. Shareholders paying that price need to know what they are buying, and what Micron’s management talks about has changed. On its fiscal Q2 2025 call, in March 2025, management talked about inventory at its automotive customers. On its latest call, it emphasized something else. So what does Micron talk about now, and how big is it?
Micron Now Emphasizes Customer Supply Agreements And AI
On its fiscal Q4 2026 call, held on September 30, 2026, management made the case for its supply agreements with customers, calling them “transformational for us in terms of being able to match supply.” It also said that agentic AI is growing fast and that Micron is seeing stronger demand drivers than it has seen before.
That is a different conversation from the one on March 20, 2025, when management pointed to efforts by its automotive customers to improve their inventory. Automotive mattered then, because the Automotive and Embedded Business Unit brought in 18.4% of Micron’s revenue in fiscal 2024. AI data center demand already came up on that March 2025 call. What has changed in eighteen months is that the automotive inventory problem no longer comes up on the call, while supply deals with customers and fast-growing AI demand do.
How Big Are Micron’s Cloud And Automotive Businesses?
Micron’s Cloud Memory Business Unit brought in $13.5 billion in fiscal 2025, nearly three times the $4.75 billion from the Automotive and Embedded Business Unit. The two divisions also grew at very different speeds. Cloud memory revenue rose 256.6% that year, while automotive revenue grew 2.6%. Automotive kept growing, then, but its share of Micron’s revenue slipped to 12.7% in fiscal 2025.
Management has also provided a figure for data center sales. On the June 24, 2026 call, the company said data center revenue exceeded $25 billion in fiscal Q3 2026, a quarter in which Micron reported total revenue of $41.5 billion. For that quarter, more than half of what Micron sold went to data centers.
What Does Micron’s New Focus Mean For Shareholders?
So far, the results accompanying this new focus look reassuring. Micron’s operating margin was 80.7% in fiscal Q4 2026, against 32.3% in fiscal Q4 2025, and the company held more cash than debt on September 3, 2026.
The concern is price. On the September 30 call, management said margins for the rest of fiscal 2027 would expand from the first quarter’s level on continued price increases at a more moderate pace, and added that “eventually price increases would moderate.” For shareholders, the pace of those price increases now matters far more than inventory at automotive customers did in March 2025.
Micron’s gross margin, which stood at 86.8% in fiscal Q4 2026, is the number to watch when the company reports again, expected in December 2026.
Does This Mean You Should Act On MU?
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