Micron Technology, Inc. (MU) Income Statement

The trajectory implies a demand shock of unusual magnitude: sequential revenue roughly doubled between 2026Q1 ($13.6B) and 2026Q2 ($23.9B), then again to 2026Q3 ($41.5B), consistent with the HBM3E and AI-server capacity transition described in Micron's strategic disclosures. However, the collapse in year-over-year growth from 196.3% in 2026Q2 to 3.5-3.8% in the two most recent quarters suggests the comparison base has caught up, and investors should consider whether future growth will be driven by bit volume rather than the pricing recovery that appears to have powered this ramp. Given management declined to issue forward guidance, the durability of this trajectory remains unquantified from company data.

A gross margin of 86.8% implies that cost of goods sold declined from 73% to just 13% of revenue even as revenue grew eight-fold, a pattern consistent with selling previously written-down inventory at recovering market prices rather than purely structural pricing power. In memory economics, this dynamic is historically transient: as Korean competitors add HBM capacity and standard DRAM supply tightens, the ASP tailwind Micron is currently capturing should compress unless proprietary node leadership at 1-beta DRAM sustains a genuine cost-per-bit advantage. The trajectory from 26.9% to 86.8% in ten quarters is the single most important number to underwrite, and it warrants careful reconciliation against the more conservative 39.8% gross margin referenced elsewhere in Micron's recent disclosures.

SG&A moved from $291 million to $859 million while revenue expanded nearly eight-fold, and R&D grew from $850 million to $1.9 billion, meaning operating expenses absorbed less than 5.2% of revenue in the latest quarter versus roughly 17% at the trough — the operating leverage embedded in a high-fixed-cost fab model is clearly visible. This is the strongest fundamental argument for Micron's earnings elasticity, but memory industry history suggests the same leverage reverses violently on the downside, since depreciation on multi-billion-dollar fabrication equipment is largely unscalable when utilization falls. The 67.1 percentage point swing in operating margin over ten quarters implies the market may be extrapolating a cyclical peak into a structural plateau.