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Micron's DRAM Sales Reach $40B: Can AI Demand Drive Growth?
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Key Takeaways
Micron's DRAM revenues hit $39.8B in Q4'26, up 343% y/y and 27% sequentially.
AI workloads and larger models are driving DRAM demand, with server unit growth expected in the high teens.
Micron expects DRAM bit shipments to grow in the low-20% range in 2027 and 2028 amid tight industry supply.
Micron Technology, Inc.’s (MU - Free Report) DRAM business is emerging as one of the biggest beneficiaries of the AI infrastructure boom. The company’s DRAM revenues reached a record $39.8 billion in the fourth quarter of fiscal 2026, accounting for 73% of the total revenues. Sales skyrocketed 343% year over year and grew 27% sequentially, driven by strong pricing and rising demand.
AI workloads are driving higher memory requirements as models become larger and more complex. Growing model sizes, longer context windows and higher usage are increasing the amount of DRAM and storage needed to run AI efficiently. Micron expects server unit growth in the high-teens percentage range in both 2026 and 2027, providing a favorable demand backdrop for its DRAM products.
High-bandwidth memory (HBM) is another important growth opportunity. Micron’s HBM revenues grew faster than total company revenues in the fiscal fourth quarter as shipments expanded across more customers. It has also completed agreements covering most of its 2027 HBM bit supply, with significantly higher prices compared with the prior year.
The broader DRAM market also appears supportive. Micron expects industry DRAM bit shipments to grow in the low-20% range in 2027 and 2028, while the market remains supply constrained. The company sees no clear timeline for supply and demand to return to balance.
Given strong AI-driven demand, tight supply and improving pricing, Micron’s DRAM business appears well-positioned for growth. The Zacks Consensus Estimate for Micron’s fiscal 2027 DRAM revenues is pegged at $204.04 billion, indicating a 102.7% surge from the $100.68 billion reported in fiscal 2026.
Zscaler’s Rivals Also Benefit From AI Memory Demand
Zscaler’s major competitors, SK hynix (SKHY - Free Report) and Sandisk Corporation (SNDK - Free Report) , are also benefiting from AI-led demand for memory and storage solutions.
SK hynix is one of Micron’s closest DRAM rivals and has a strong position in HBM, which is critical for AI accelerators. In the second quarter of 2026, SK hynix generated 79.3 trillion Korean won in revenues, up 257% year over year, while operating profit surged 557% to 60.5 trillion won. HBM, AI-server DRAM and enterprise SSDs drove the strong results.
Sandisk is more focused on NAND and storage than DRAM, but it is another stock that stands to benefit from AI infrastructure spending. Its fiscal 2026 revenues jumped 175% to $20.25 billion, while data-center revenues soared 437% to $5.15 billion. Sandisk’s fourth-quarter fiscal 2026 revenues also surged 372% sequentially to $8.97 billion, showing strong demand for storage products used in data centers.
Both companies highlight the broadening AI-driven demand for memory and storage, although Micron remains particularly well-positioned in DRAM and HBM.
Micron’s Price Performance, Valuation & Estimates
Shares of Micron have surged 281.2% year to date compared with the Zacks Computer and Technology sector’s return of 25.8%.
Micron Technology YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, MU trades at a forward price-to-earnings ratio of 6.43, significantly lower than the sector’s average of 21.39.
Micron Technology 12-Month Forward P/E Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Micron’s fiscal 2027 and 2028 earnings implies year-over-year increases of 133.9% and 20.6%, respectively. Bottom-line estimates for fiscal 2027 and 2028 have been revised upward over the past seven days.
View the Zacks #1 Rank List
Image: Bigstock
Micron's DRAM Sales Reach $40B: Can AI Demand Drive Growth?
Key Takeaways
Micron Technology, Inc.’s (MU - Free Report) DRAM business is emerging as one of the biggest beneficiaries of the AI infrastructure boom. The company’s DRAM revenues reached a record $39.8 billion in the fourth quarter of fiscal 2026, accounting for 73% of the total revenues. Sales skyrocketed 343% year over year and grew 27% sequentially, driven by strong pricing and rising demand.
AI workloads are driving higher memory requirements as models become larger and more complex. Growing model sizes, longer context windows and higher usage are increasing the amount of DRAM and storage needed to run AI efficiently. Micron expects server unit growth in the high-teens percentage range in both 2026 and 2027, providing a favorable demand backdrop for its DRAM products.
High-bandwidth memory (HBM) is another important growth opportunity. Micron’s HBM revenues grew faster than total company revenues in the fiscal fourth quarter as shipments expanded across more customers. It has also completed agreements covering most of its 2027 HBM bit supply, with significantly higher prices compared with the prior year.
The broader DRAM market also appears supportive. Micron expects industry DRAM bit shipments to grow in the low-20% range in 2027 and 2028, while the market remains supply constrained. The company sees no clear timeline for supply and demand to return to balance.
Given strong AI-driven demand, tight supply and improving pricing, Micron’s DRAM business appears well-positioned for growth. The Zacks Consensus Estimate for Micron’s fiscal 2027 DRAM revenues is pegged at $204.04 billion, indicating a 102.7% surge from the $100.68 billion reported in fiscal 2026.
Zscaler’s Rivals Also Benefit From AI Memory Demand
Zscaler’s major competitors, SK hynix (SKHY - Free Report) and Sandisk Corporation (SNDK - Free Report) , are also benefiting from AI-led demand for memory and storage solutions.
SK hynix is one of Micron’s closest DRAM rivals and has a strong position in HBM, which is critical for AI accelerators. In the second quarter of 2026, SK hynix generated 79.3 trillion Korean won in revenues, up 257% year over year, while operating profit surged 557% to 60.5 trillion won. HBM, AI-server DRAM and enterprise SSDs drove the strong results.
Sandisk is more focused on NAND and storage than DRAM, but it is another stock that stands to benefit from AI infrastructure spending. Its fiscal 2026 revenues jumped 175% to $20.25 billion, while data-center revenues soared 437% to $5.15 billion. Sandisk’s fourth-quarter fiscal 2026 revenues also surged 372% sequentially to $8.97 billion, showing strong demand for storage products used in data centers.
Both companies highlight the broadening AI-driven demand for memory and storage, although Micron remains particularly well-positioned in DRAM and HBM.
Micron’s Price Performance, Valuation & Estimates
Shares of Micron have surged 281.2% year to date compared with the Zacks Computer and Technology sector’s return of 25.8%.
Micron Technology YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, MU trades at a forward price-to-earnings ratio of 6.43, significantly lower than the sector’s average of 21.39.
Micron Technology 12-Month Forward P/E Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Micron’s fiscal 2027 and 2028 earnings implies year-over-year increases of 133.9% and 20.6%, respectively. Bottom-line estimates for fiscal 2027 and 2028 have been revised upward over the past seven days.
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.