Micron's AI-Driven Surge Faces Key Earnings Test

Micron's Q2 earnings test its AI-driven growth. With HBM supply sold out through 2026 and a $200B US expansion, the memory leader eyes a $100B market by 2028.

Investor attention is laser-focused on Micron Technology as the memory chip leader prepares to deliver its quarterly results, a report that will test the sustainability of its artificial intelligence-fueled growth narrative. The company has confirmed it will release figures for the second quarter of its fiscal 2026 after the U.S. market closes on Wednesday, March 18.

High Stakes for Q2 Guidance

The upcoming earnings release serves as a critical benchmark. Micron has set a high bar with its own outlook, projecting non-GAAP revenue of approximately $18.7 billion (±$400 million), a gross margin near 68% (±100 basis points), and earnings per share (EPS) of around $8.42 (±$0.20). This follows a stellar first quarter, where the company reported a 57% year-over-year revenue surge to $13.64 billion.

Market participants are positioning themselves ahead of this date, keen to see if the firm can meet or exceed these ambitious targets and potentially deliver another record quarter.

Structural Shortage Powers Long-Term Outlook

At the core of Micron's bullish story is High-Bandwidth Memory (HBM), a specialized form of DRAM essential for AI accelerators in data centers. The company has indicated that pricing and volume for its entire HBM supply for calendar year 2026 are already under contract, including its next-generation HBM4 products. This provides exceptional visibility into future capacity utilization and pricing power.

The long-term forecast is even more striking. Micron anticipates the total addressable HBM market will expand at a compound annual growth rate of roughly 40%, ballooning from an estimated $35 billion in 2025 to about $100 billion by 2028. Notably, the company now expects to hit that $100 billion threshold two years earlier than its previous assessment.

This points to a structural supply constraint rather than a typical semiconductor cycle. Analysts suggest the scarcity of these advanced memory chips could persist through 2028. When demand consistently outpaces supply, manufacturers like Micron retain significant pricing authority.

Massive Capacity Expansion Underway

To capitalize on this demand, Micron is embarking on a historic capital expenditure program in the United States, with a total envisioned investment of roughly $200 billion. This strategy encompasses new fabrication plants in Idaho and New York, modernization of its Virginia site, additional HBM packaging capacity, and ramped-up research and development.

Construction is already progressing on a $100 billion complex in Clay, New York, with production commencement expected in 2030. Government support is also a factor, with the company securing up to $6.4 billion in direct grants under the CHIPS Act.

The company is accelerating its spending, raising its capital expenditure forecast for fiscal 2026 to $20 billion, up from a prior guidance of $18 billion. Furthermore, the first wafers from its initial Idaho fab are now anticipated by mid-2027, ahead of the original schedule.

However, these expansions are a multi-year endeavor. The text emphasizes that new capacity takes years to come online, meaning the near-term supply tightness cannot be quickly resolved.

Share Performance and Immediate Focus

Micron shares currently trade at €350.95, sitting approximately 5.4% below their 52-week high.

All eyes will be on the March 18 report. The market will scrutinize whether Micron hits its Q2 forecast and if management reinforces the thesis of a prolonged HBM supply crunch. For context, Micron has pointed to a combined earnings expectation of about $13 per share for the first half of fiscal 2026, setting a clear benchmark for the coming weeks.