In 2023, Micron was selling memory below cost. Today, its gross margin is 87%, and quarterly revenue has grown nearly fivefold in a year.

17 Wall Street firms published notes on the latest results. Here are the key takeaways:

1. Results beat expectations again. Revenue came in at $54.2 billion versus $50.5 billion expected, and guidance for next quarter is $61.5 billion versus $56.8 billion. Morgan Stanley notes that over the last three quarters, Micron has beaten consensus EPS and guided 20% to 40% above it.

2. CAPEX is rising too. Analysts now estimate FY2027 capex at $50 billion to $55 billion, up from about $45 billion. Most of the increase will go toward cleanrooms, the manufacturing spaces where chips are produced in air thousands of times cleaner than an operating room. The new space comes online in late 2028 and beyond.

3. Cash flow still far exceeds spending. Rosenblatt expects free cash flow above $100 billion in FY2027, even with higher capex, and Mizuho expects more than $140 billion. The current consensus is $117 billion, a 9.8% FCF yield.

4. Micron promises to return all excess cash to shareholders. If it returns most of its FCF, its shareholder yield from buybacks and dividends could rank in the top 10% of US stocks next year.

5. The order book is growing. Strategic Customer Agreements rose to 26 from 16. These are multiyear memory supply contracts, mostly with large AI customers, and they cover more than 35% of revenue through 2030. According to Wells Fargo and Goldman, about 75% of the revenue under these agreements has a price band. A floor protects Micron if memory prices fall sharply, and a ceiling limits its upside when prices peak.

6. Most of 2027 production is already sold. More than 75% of Micron's 2027 production is under contract. Management expects shortages to be more severe in 2027 and 2028 than in 2026.

7. HBM could become even more profitable. The cloud memory segment, which includes HBM, has Micron's lowest gross margin: 83%, versus 90% in its core data center business, because of contracts signed at older prices. Micron has already contracted most of its 2027 HBM output at significantly higher prices. Mizuho estimates the increase at 70% to 100%.

Micron scores near the top on growth and quality, yet trades at 7x forward earnings, below its own 10-year median (11x). The market is pricing a cycle peak. That peak doesn't look close. $MU