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Micron's Data Center Business Booms: Is More Upside Left?
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Key Takeaways
Micron's data center revenues topped $25B in Q3 FY26, led by robust AI-driven demand.
Micron is expanding AI memory products, including HBM4, HBM4E, DDR5 RDIMMs and PCIe Gen6 SSDs.
Micron has 16 multi-year customer agreements that improve long-term data center revenue visibility.
Micron Technology's (MU - Free Report) booming data center business has become its biggest growth driver, positioning the company to benefit from sustained AI infrastructure investments. In third-quarter fiscal 2026, the company's data center revenues exceeded $25 billion, representing an annualized run rate of more than $100 billion, while data center SSD revenues more than doubled sequentially. Management attributed this momentum to robust AI-driven demand, with hyperscalers requiring greater memory bandwidth and capacity for increasingly complex AI workloads. The company expects DRAM and NAND demand to continue outpacing industry supply beyond 2027, supporting favorable pricing and revenue growth.
Micron is further strengthening its position through advanced AI memory products, including HBM4, HBM4E, high-capacity DDR5 RDIMMs and next-generation PCIe Gen6 SSDs, enabling it to capture higher-value opportunities across AI servers and cloud infrastructure. The company is also benefiting from 16 multi-year Strategic Customer Agreements, which provide committed supply arrangements and improve long-term revenue visibility from leading data center customers.
Beyond the quarterly results, Micron reinforced its AI data center strategy during COMPUTEX 2026 by expanding its end-to-end AI memory and storage portfolio, and its recent strategic collaboration in June 2026 with Anthropic further strengthens its role in next-generation AI infrastructure. With AI adoption accelerating across cloud computing, enterprise applications and emerging inference workloads, Micron appears well-positioned to sustain strong data center growth.
Continued product leadership, expanding customer commitments and structural industry supply constraints could provide additional upside for the company's revenues over the coming years, supporting the Zacks Consensus Estimate for annual revenue growth of 224.96% in fiscal 2026 and 83.21% in fiscal 2027.
How Micron Is Tackling AI Data Center Competition
NVIDIA (NVDA - Free Report) holds a broader competitive advantage through its full-stack AI platform spanning GPUs, networking, software and systems. NVIDIA emphasizes integrated AI infrastructure and ecosystem expansion, while Micron supplies critical HBM memory. NVIDIA benefits from larger AI infrastructure opportunities, stronger platform lock-in and superior ecosystem scale.
Compared with Micron’s memory-centric AI strategy, Marvell Technology (MRVL - Free Report) competes through custom AI silicon, networking and optical interconnects for hyperscale data centers. Marvell Technology prioritizes cloud infrastructure partnerships and connectivity solutions, complementing Micron’s HBM offerings. Marvell Technology gains strength from custom chip design, networking expertise, and expanding AI infrastructure demand.
Micron shares have surged 286.9% in the past six-month period, outperforming the Zacks Computer-Integrated Systems industry’s 129.3% rally and the broader Computer and Technology sector’s return of 11.8%.
MU’s Six-Month Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, MU trades at a forward price/sales (P/S) ratio of 6.24x, slightly lower than the sector’s average of 6.35x. The company carries a Value Score of F.
MU Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Micron’s earnings per share is pegged at $64.26 for fiscal 2026 and $124.34 for fiscal 2027. These projections imply year-over-year growth of 675.15% for fiscal 2026 and 93.49% for fiscal 2027 and have been revised upward over the past 30 days for both fiscal years.
View the Zacks #1 Rank List
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Micron's Data Center Business Booms: Is More Upside Left?
Key Takeaways
Micron Technology's (MU - Free Report) booming data center business has become its biggest growth driver, positioning the company to benefit from sustained AI infrastructure investments. In third-quarter fiscal 2026, the company's data center revenues exceeded $25 billion, representing an annualized run rate of more than $100 billion, while data center SSD revenues more than doubled sequentially. Management attributed this momentum to robust AI-driven demand, with hyperscalers requiring greater memory bandwidth and capacity for increasingly complex AI workloads. The company expects DRAM and NAND demand to continue outpacing industry supply beyond 2027, supporting favorable pricing and revenue growth.
Micron is further strengthening its position through advanced AI memory products, including HBM4, HBM4E, high-capacity DDR5 RDIMMs and next-generation PCIe Gen6 SSDs, enabling it to capture higher-value opportunities across AI servers and cloud infrastructure. The company is also benefiting from 16 multi-year Strategic Customer Agreements, which provide committed supply arrangements and improve long-term revenue visibility from leading data center customers.
Beyond the quarterly results, Micron reinforced its AI data center strategy during COMPUTEX 2026 by expanding its end-to-end AI memory and storage portfolio, and its recent strategic collaboration in June 2026 with Anthropic further strengthens its role in next-generation AI infrastructure. With AI adoption accelerating across cloud computing, enterprise applications and emerging inference workloads, Micron appears well-positioned to sustain strong data center growth.
Continued product leadership, expanding customer commitments and structural industry supply constraints could provide additional upside for the company's revenues over the coming years, supporting the Zacks Consensus Estimate for annual revenue growth of 224.96% in fiscal 2026 and 83.21% in fiscal 2027.
How Micron Is Tackling AI Data Center Competition
NVIDIA (NVDA - Free Report) holds a broader competitive advantage through its full-stack AI platform spanning GPUs, networking, software and systems. NVIDIA emphasizes integrated AI infrastructure and ecosystem expansion, while Micron supplies critical HBM memory. NVIDIA benefits from larger AI infrastructure opportunities, stronger platform lock-in and superior ecosystem scale.
Compared with Micron’s memory-centric AI strategy, Marvell Technology (MRVL - Free Report) competes through custom AI silicon, networking and optical interconnects for hyperscale data centers. Marvell Technology prioritizes cloud infrastructure partnerships and connectivity solutions, complementing Micron’s HBM offerings. Marvell Technology gains strength from custom chip design, networking expertise, and expanding AI infrastructure demand.
MU’s Share Price Performance, Valuation & Estimates
Micron shares have surged 286.9% in the past six-month period, outperforming the Zacks Computer-Integrated Systems industry’s 129.3% rally and the broader Computer and Technology sector’s return of 11.8%.
MU’s Six-Month Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, MU trades at a forward price/sales (P/S) ratio of 6.24x, slightly lower than the sector’s average of 6.35x. The company carries a Value Score of F.
MU Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Micron’s earnings per share is pegged at $64.26 for fiscal 2026 and $124.34 for fiscal 2027. These projections imply year-over-year growth of 675.15% for fiscal 2026 and 93.49% for fiscal 2027 and have been revised upward over the past 30 days for both fiscal years.
Image Source: Zacks Investment Research
Micron currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.