Micron Set to Be Third-Most Profitable U.S. Company After NVDA, GOOGL

Micron Technology (MU) has gone from losing money three years ago to running one of the most profitable income statements in corporate America. Per MarketWatch, the memory maker is on a trajectory to be the most profitable U.S. company behind only Nvidia (NVDA) and Alphabet (GOOGL).

The numbers behind the call

Micron posted $41.46 billion in revenue and $28.24 billion in net income, numbers that put it on a trajectory to become the third most profitable company in the United States behind only Nvidia and Google.

Revenue of $41.46 billion crushed Wall Street’s consensus estimate of $35.84 billion by a wide margin. Micron set Q4 2026 revenue guidance at approximately $50 billion, suggesting the company expects sustained margin strength heading into the second half of the year. If that number holds, Micron would be generating revenue at an annualized run rate north of $150 billion.

Margins now top Nvidia and Meta

Alongside its better-than-expected earnings report, Micron disclosed a gross margin, or the profit left after accounting for the cost of goods sold, of 84.9%, up from 74.9% in the prior period and 39% a year earlier.

That is the highest percentage among all major U.S. tech companies, topping social media giant Meta, which recorded a gross margin in the latest quarter of 81.9%, and AI chipmaker Nvidia at 75%. A memory company outprinting a GPU designer on margin is not how this cycle was supposed to go.

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Why this is not the old memory cycle

Micron got ahead of any AI bust chatter by emphasizing a series of long-term supply agreements, including with Nvidia and AI lab Anthropic, that would presumably protect it. The company said in its earnings presentation that it has signed 16 strategic customer agreements across the data center, consumer, and auto market segments, which it expects to fundamentally transform its business model.

It signed 16 agreements, nailing down 20% of DRAM shipments and 30% of NAND shipments. These long-term agreement customers include NVIDIA, Anthropic, Microsoft, and Google Cloud. The contracts specify minimum prices and minimum shipment volumes. Based on these contracts, future guaranteed revenue backlog has already piled up to $100 billion.

The demand for HBM, the specialized memory that sits inside the most advanced AI accelerators, has fundamentally changed the supply-demand equation. HBM is technically complex, harder to manufacture, and currently in desperately short supply. The global memory chip shortage is expected to persist through at least 2027, according to analyst forecasts.

The risks traders should not ignore

In the second half of 2027, new capacity from Samsung and SK Hynix will come crashing in. Their combined HBM capacity is 2 to 3 times Micron’s, and at lower cost. Once the growth rate of AI computing capex slows, an 85% gross margin cannot hang on forever.

Micron’s products basically cannot enter the Chinese mainland market. The world’s second-largest market for computing demand can only watch from the sidelines.

Options market and stocks to watch

Watch for follow-through across the AI memory and accelerator complex as traders digest whether Micron’s margin print is a peak or a new baseline.

• MU: Watch for continued repricing of forward multiples now that guidance points toward a roughly $50B revenue quarter and HBM supply is locked.
• NVDA: Watch for any read-through on AI accelerator demand, since Micron’s HBM is going straight into Nvidia systems.
• GOOGL: Watch as a hyperscaler customer named in Micron’s long-term agreements and as one of the two companies still ahead of MU on profitability.
• META: Watch for capex commentary, given Micron just leapfrogged Meta on gross margin.
• WDC: Watch for spillover bid as NAND and broader memory pricing power tightens alongside DRAM.

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