Earning more than MS(MSFT)?...Micron(MU), a Grand Reversal Scenario Emerges for 2027

▲ Micron(MU) Logo/Source: X

Micron Technology (MU), the largest memory semiconductor company in the United States, has written a grand reversal scenario. Projections indicate that its net profit for fiscal year 2027 could surpass Microsoft's (MSFT) all-time high record. This is a result of the artificial intelligence (AI) semiconductor boom.

According to Nasdaq on September 20 (local time), an analysis suggests that if Micron's latest performance guidance is annualized, it could exceed Microsoft's highest ever annual net profit. This is thanks to the explosive demand for High Bandwidth Memory (HBM) and high-performance DRAM. The profitability of memory semiconductors, traditionally a low-profit cyclical industry, is now surpassing that of big tech software companies.

Micron provided an EPS guidance of $30.73 for the fourth quarter. If this quarterly net profit trend continues for four consecutive quarters, it would exceed Microsoft's record-high net profit for fiscal year 2026. Some on Wall Street even predict that Micron's earnings per share for fiscal year 2027 could soar to between $149.40 and $155.03.

The primary driver of this rapid earnings growth is the expansion of AI data centers. Micron's HBM volume for production up to 2027 is already completely sold out. The company has secured over $22 billion in advance cash deposits through long-term strategic customer agreements (SCA). By setting a price floor above past boom-time peaks, Micron has also mitigated the risk of a downturn in the cycle.

The volatility of the memory market remains a factor to watch. For the current strong performance trend to continue, high memory prices and global AI investments must be sustained. There is also the persistent concern that if supply shortages are resolved due to increased capacity by competitors, Micron's pricing power could diminish.

Riding the AI super cycle, Micron is now eyeing the net profit stronghold of the software giant. The market is keenly watching whether Micron, based on its volume advantage centered on high-margin HBM, can completely reshape the semiconductor industry landscape.

[Article Key Summary]

-If Micron's (MU) current quarterly net profit trend continues, its net profit for fiscal year 2027 is projected to surpass Microsoft's (MSFT) all-time high record.

-Driven by the AI data center construction boom, HBM volumes are completely sold out until 2027, leading to an explosive improvement in Micron's profitability.

-While the risk of falling memory prices due to industry capacity expansion remains, Micron has established a downside protection network through strategic customer agreements.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*