Key Points
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Micron’s record quarter was driven by demand for the high-bandwidth memory that powers AI accelerators.
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Micron’s entire calendar 2026 supply of this memory is already reserved by customers.
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Nvidia’s stock slipped on the news even as Micron’s surged.
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Memory chips rarely steal the spotlight from the processors they support. But Micron Technology (NASDAQ: MU) just posted a quarter big enough to do exactly that — and the read-through may matter most for investors in Nvidia (NASDAQ: NVDA), whose artificial intelligence (AI) accelerators are built around the very memory Micron is scrambling to supply.
Micron’s stock jumped about 16% as of this writing on the results. Nvidia’s, oddly, slipped about 1.6% on the same day. But look past the one-day move, and Micron’s report says something encouraging about how strong — and how durable — demand for AI chips looks heading into Nvidia’s next chapter.
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A record quarter built on AI memory
Micron’s fiscal third quarter of 2026 (the period ended May 28, 2026) was the biggest in the company’s history. Revenue jumped 346% year over year to a record $41.46 billion, up from $9.30 billion a year ago, and climbed 74% from the prior quarter. Gross margin reached a record of about 85%, and non-GAAP (adjusted) earnings per share came in at $25.11.
The engine behind those numbers is high-bandwidth memory (HBM) — the dense, fast memory stacked alongside the processors inside AI servers. Micron’s data center revenue hit about $25 billion in the quarter, and its newest HBM4 product has already shipped more than $1 billion, ramping about twice as fast as the prior generation. Management guided for fiscal fourth-quarter revenue of $50 billion, which would be another 20% jump from the quarter it just reported.
What stands out most isn’t the size of the quarter — it’s how locked in the demand looks. Micron’s entire 2026 supply of HBM is already sold out under multi-year, fixed-price agreements, and the company said it can currently fill only about half to two-thirds of what several of its key customers want.
“Micron’s record fiscal Q3 financial results and even stronger outlook for Q4 reflect the strategic value of memory in the AI era,” said CEO Sanjay Mehrotra in the company’s fiscal third-quarter earnings release.
What it means for Nvidia
Micron’s HBM gets stacked directly onto AI accelerators like Nvidia’s Blackwell chips and the Vera Rubin platform set to ramp in the second half of this year. Micron is one of only a few companies in the world that can make it — so when it says that memory is spoken for years in advance, it’s effectively describing the order book for the chips the memory feeds.
Nvidia’s own numbers point the same way.
In its fiscal first quarter of 2027 (the period ended April 26, 2026), revenue rose 85% year over year to $81.6 billion, with data center revenue setting a record at $75.2 billion. CEO Jensen Huang has said he sees at least $1 trillion in revenue from 2025 through 2027. Micron’s HBM4 ramping twice as fast as its predecessor is a quiet vote of confidence in that next wave, since Vera Rubin leans on the newest memory.
So why did Nvidia stock slip while Micron’s soared?
Part of it is that a sold-out, supply constrained memory market also means pricier memory — a cost Nvidia may have to absorb or pass along. And AI sentiment has grown quick to punish any wrinkle. Of course, those are fair concerns. But they don’t change the larger signal: the memory that goes into AI chips is sold out well into the future, which is hard to square with a demand boom that’s about to fade.
This isn’t to say that Nvidia is a sure thing. After all, it’s not like shares are cheap. They trade at 30 times earnings. Additionally, we can’t rule out the possibility of this AI boom’s growth rate cooling faster than expected.
Still, for a company that just grew revenue 85%, you can’t really call the stock expensive either. And Micron’s incredible quarter is one more piece of evidence that the AI boom still looks like it’s in the early innings.
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Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology and Nvidia. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
