Earnings Call Insights: Micron Technology, Inc. (MU) Q4 2025
Management View
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CEO Sanjay Mehrotra was referenced during the call but did not provide direct remarks; key business updates were provided by Sumit Sadana, Executive VP & Chief Business Officer. Sadana indicated the company expects “the large hyperscalers are looking like they will be needing a significantly more storage capability for their AI server deployment because they have shortages on that side from the HDD segment of the market. And so the deployment of NAND SSDs and servers and data centers more broadly is going to increase in calendar ’26.”
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Sadana confirmed Micron’s expectation to leverage its strong position in the data center SSD market, stating, “we have been hitting record share after record share for several years now and have a really strong position in the market.”
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Regarding HBM (high bandwidth memory), Sadana stated, “we expect to be in the vicinity of our DRAM supply share in calendar Q3 in 2025. So in 2026, for the full calendar year, we will expect to have higher share in HBM compared to calendar ’25.”
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On strategic shifts, Sadana discussed the exit from managed NAND, explaining, “there will be more supply availability for us to focus on the data center market.”
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CFO Mark Murphy stated, “we’re going to go from $13 billion to $18 billion net in ’25 and net approximately $18 billion in ’26. And the vast majority of that is for DRAM, construction and equipment.”
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Murphy also commented on supply and inventory management, noting, “we structurally brought down wafer outs and NAND. We continue to slow node transitions there and pace new node ramps.”
Outlook
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Sadana indicated, “the NAND industry will improve. The improvement in the DRAM business is definitely ahead from a time perspective in terms of being tight. NAND is improving and getting tighter, but DRAM is tight already today and getting even tighter going forward.”
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Murphy shared that Micron expects “second quarter gross margin to be up relative to first,” emphasizing favorable market conditions.
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Sadana projected, “we believe that, that tightening is going to enable improving pricing and margins on the non-HBM portion of the portfolio.”
Financial Results
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Murphy stated, “the margin we reported is now above where it was in mid fiscal ’22 and DRAM margins are higher than that mid-’22 period. The operating margin is the highest that it’s been since November ’18.”
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Murphy added, “we have completed a second year of positive free cash flow in NAND.”
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Bhatia highlighted successful technology ramp: “We were able to achieve both mature yield this quarter as well as first revenue shipments into hyperscalers as well as other applications” with the 1-gamma node.
Q&A
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Thomas O’Malley, Barclays: Asked about NAND bit growth and industry pricing. Sadana replied, “I wouldn’t read too much into the bits for F Q4. It’s really just noise based on just a few things, different segments moving around in our mix.”
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O’Malley inquired on CapEx guidance. Murphy answered, “we’re going to go from $13 billion to $18 billion net in ’25 and net approximately $18 billion in ’26.”
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Joseph Moore, Morgan Stanley: Asked about HBM market share. Sadana responded, “we expect to be in the vicinity of our DRAM supply share in calendar Q3 in 2025. So in 2026, for the full calendar year, we will expect to have higher share in HBM compared to calendar ’25.”
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James Schneider, Goldman Sachs: Questioned HBM4 share sustainability. Sadana explained, “we believe that our HBM4 has the highest performance amongst any competing product out there…we have confidence that we will sell out that supply for calendar ’26.”
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Christopher Danely, Citi: Asked about DDR4 and DDR5 mix and gross margin drivers. Sadana clarified, “DDR4 just by itself, not counting LP4 has actually been a low single-digit percentage of the business.”
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Danely also pressed on gross margin improvements. Murphy said, “prices continue to improve. The market conditions are very good. very tight on DRAM and they’ve improved in NAND and continue to improve.”
Sentiment Analysis
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Analyst tone was inquisitive and focused on granular details of memory mix, margin sustainability, CapEx, and competitive positioning, with several questions pressing for clarity on margin drivers, share gains, and technology roadmap.
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Management demonstrated confidence, frequently emphasizing strong competitive positioning, robust demand, and portfolio strategy. Phrases such as “we are very confident in the capabilities of our product” and “we have confidence that we will sell out that supply for calendar ’26” were used. Responses remained measured and occasionally cautious, especially when declining to provide specifics on cost-down guidance or facility CapEx breakdowns.
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Compared to the previous quarter, the management tone remains confident but is more explicit about strategic shifts and higher CapEx, while analysts displayed heightened interest in competitive dynamics and technology transitions.
Quarter-over-Quarter Comparison
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Guidance language shifted to emphasize higher CapEx ($18 billion net) and a DRAM-focused investment strategy for 2025 and 2026.
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Strategic focus has clearly pivoted further toward AI-driven data center demand, HBM share, and managed NAND exit.
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Analysts in the current quarter concentrated more on HBM4 competitive positioning, CapEx scaling, and gross margin expansion, compared to the previous quarter’s broader mix and pricing questions.
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Management’s confidence is sustained, with more assertive statements about expected HBM4 share and the DRAM supply outlook. Analyst sentiment has shifted from general optimism to more pressing queries about execution and sustainability.
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The mix of revenue from data center and high-value segments continues to rise, as noted in both quarters, but is now described as a structural shift with “AI has radically changed the landscape.”
Risks and Concerns
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Management highlighted ongoing supply constraints in DRAM and NAND, noting, “meaningful incremental supply is difficult to bring on.”
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Sadana acknowledged uncertainties related to tariffs and customer transitions, stating, “we also have changes that are likely to happen on the landscape due to tariffs, and we’ll have to respond to that when they become when they are announced.”
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The decision to exit managed NAND was based on ROI concerns and portfolio optimization, with Sadana stating, “the pricing expectations and the level of competitiveness in the mobile NAND market did not lend itself for robust ROI over time.”
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Analysts raised questions regarding long-term agreements, customer transitions, and the impact of new memory architectures (e.g., GDDR7 vs. HBM).
Final Takeaway
Micron’s management emphasized its strengthened competitive position in AI-driven markets, projecting higher HBM market share and signaling a DRAM-focused $18 billion CapEx plan through 2026. The company highlighted robust demand and pricing for both DRAM and NAND, driven by data center and hyperscaler needs, while addressing ongoing supply constraints and a strategic exit from managed NAND. Management remains confident in margin expansion and continued technology leadership, positioning Micron to capitalize on accelerating AI data center growth in the coming year.