Micron Posts Record 84.9% Gross Margin, Surpassing Nvidia and Meta Amid Global Memory Shortage

Micron Technology reported a fiscal third-quarter gross margin of 84.9% on Wednesday, overtaking every major U.S. technology company — including Nvidia and Meta — as a worldwide shortage of memory chips drives prices to historic levels.

The figure marks a sharp climb from 74.9% in the prior quarter and 39% a year earlier, underscoring how quickly the company's pricing power has shifted in a market where demand for memory is outpacing supply.

"Fiscal Q3 gross margin more than doubled from a year ago and was a new company record," CFO Mark Murphy said on the earnings call.

For context, Meta recorded a gross margin of 81.9% in its most recent quarter, while AI chipmaker Nvidia came in at 75%. Among other large-cap technology companies, Broadcom sits at 69.5%, Microsoft at 67.6%, and Alphabet at 62.4%. Micron's closest rival, Sandisk, reported a quarterly gross margin of 78.4% in late April, up from 51.1% in the prior period.

Revenue for Micron's fiscal third quarter reached $41.46 billion, more than $20 billion above the prior period — which itself had been the company's highest in its 48-year history. Net income of $28.24 billion more than doubled the previous record, also set last quarter.

Micron's stock closed up more than 700% over the past year as of Wednesday, pushing its market capitalization well past $1 trillion. Shares rose an additional 14% in extended trading following the earnings release.

The surge reflects a structural shift in memory markets, driven largely by artificial intelligence infrastructure buildout. Nvidia, Advanced Micro Devices, and Google all depend on Micron's high-bandwidth memory for their AI processors, while consumer electronics makers face rising costs for standard memory components as well.

Apple CEO Tim Cook acknowledged the pressure in an interview published last week, describing the memory situation as "unsustainable" and indicating the iPhone maker would need to raise prices as a result.

To lock in its pricing advantage, Micron said it is entering long-term contracts called strategic customer agreements — a departure from the industry's traditional reliance on short-term supply arrangements.

"For our SCAs with price bands, the floor price enables a very robust gross margin for Micron, well above our peak quarterly margins in any past cycle," CEO Sanjay Mehrotra said on the call.

Nvidia's gross margin had previously peaked at around 79% in early 2024, a level that drew wide attention as the company rode a surge in demand for AI computing hardware. Micron's current margin sits roughly six percentage points above that peak.

Mehdi Hosseini, an analyst at Susquehanna, said on Wednesday the shift represents a turn for an industry that has "been out of favor for 30 years since inception." With "the memory wall playing out, customers have no choice but to pay a premium," said Hosseini, who recommends buying Micron shares.

Looking ahead, Micron projected a gross margin of approximately 86% for its fiscal fourth quarter, and Murphy said the company expects "the market to remain tight beyond 2027" — a forward outlook that signals continued leverage over customers so long as AI infrastructure spending remains elevated.

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