BofA : Durable Micron (MU) Earnings Cycle đȘđđ
Why Bank of America sees a more durable Micron earnings cycle
What changed for Bank of America is not simply that Micron beat expectations again, as it has for the past four consecutive quarters.
The bank now sees better visibility into how long elevated pricing and profitability can last, consequently raising its earnings forecasts in the process.
BofA bumped its fiscal 2027 revenue estimate to $275.4 billion from $230.3 billion and fiscal 2028 sales to $317 billion from $244.1 billion.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
$Apple(AAPL)$
Apple's (AAPL) Sept. 9 event focused on mobile devices, but its 2026 product plans extend well beyond the iPhone. According to Bloomberg Newsâ Mark Gurman, the company is preparing a major smart-home push for Tuesday, Oct. 13. The move would be one of the first significant category expansions under new Chief Executive Officer John Ternus.
Leading that push is a smart-home hub internally code-named J490, Gurman reported. Apple is also expected to unveil the first HomePod mini update since its 2020 debut and its first new Apple TV set-top box since 2022. The three products would give the company a more coordinated presence inside the home.
The hub is expected to feature a compact, roughly square display measuring about 6 to 7 inches. Apple reportedly plans versions for either countertop placement or wall mounting. Designed as a household control point, the device would use facial recognition to identify users and personalize the interface, content, and responses accordingly.
The refreshed HomePod mini and Apple TV are expected to retain their familiar designs while gaining faster processors. Those upgrades should allow them to run the same more capable Gemini-trained Siri models. Combined with the new hub, the devices could create a more connected Apple experience across the home.
That would put the Cupertino, California-based tech pioneer directly into a smart-home market long dominated by Amazon (AMZN) and Alphabet's (GOOG) (GOOGL) Google. Until now, the company has largely relied on HomeKit and third-party accessories. If these products launch as planned, Apple will make its clearest attempt yet to turn the home into another core hardware environment.
$Micron Technology(MU)$
Apple's (AAPL) Sept. 9 event focused on mobile devices, but its 2026 product plans extend well beyond the iPhone. According to Bloomberg Newsâ Mark Gurman, the company is preparing a major smart-home push for Tuesday, Oct. 13. The move would be one of the first significant category expansions under new Chief Executive Officer John Ternus.
Leading that push is a smart-home hub internally code-named J490, Gurman reported. Apple is also expected to unveil the first HomePod mini update since its 2020 debut and its first new Apple TV set-top box since 2022. The three products would give the company a more coordinated presence inside the home.
The hub is expected to feature a compact, roughly square display measuring about 6 to 7 inches. Apple reportedly plans versions for either countertop placement or wall mounting. Designed as a household control point, the device would use facial recognition to identify users and personalize the interface, content, and responses accordingly.
The refreshed HomePod mini and Apple TV are expected to retain their familiar designs while gaining faster processors. Those upgrades should allow them to run the same more capable Gemini-trained Siri models. Combined with the new hub, the devices could create a more connected Apple experience across the home.
That would put the Cupertino, California-based tech pioneer directly into a smart-home market long dominated by Amazon (AMZN) and Alphabet's (GOOG) (GOOGL) Google. Until now, the company has largely relied on HomeKit and third-party accessories. If these products launch as planned, Apple will make its clearest attempt yet to turn the home into another core hardware environment.
Micronâs Gross Margin Has Nearly Doubled In A Year
Seriously enough, because the profit Micron earns today is new. Its gross margin was 73% over the latest twelve months, against 37% a year earlier. The year before that it was 11.4%, and Micron lost money two and three years ago.
On the September 30 call, management was asked whether margins would change in 2028 from the level it implied for 2027. Management answered that it expects the market to stay tight through 2028, though start-up costs would partly offset higher prices. Its own first-quarter guidance already factors in a double-digit change in cost for both DRAM and NAND memory chips.
What Micron Would Earn At Last Yearâs Margin
Micron would earn far less than it does now. It kept 55.9% of its revenue as net income over the latest twelve months, against 18.4% a year earlier. At that earlier margin, the same $90.3 billion of revenue would have produced about $16.6 billion of profit. Micron actually earned $50.5 billion. Lower prices would also mean lower revenue, so that sum is on the generous side.
You pay 24.0 times earnings for the stock, against 21.5 for the S&P 500, but that multiple is on the profit of the latest twelve months. And Micron stock has fallen harder than the market when investors turned cautious. It lost 49% in the 2022 inflation shock, against 24% for the S&P 500.
If Prices Turn, Micron Has Contracts And Cash
More than 75% of Micronâs shipments for the year are already committed, management said. Micron has also signed long-term agreements with customers. About three quarters of the revenue under them has a defined pricing framework, mostly with a floor and a ceiling. The other quarter is open to negotiation or moves with market prices.
Its finances would not be in question either. Micron holds $19.6 billion more cash than debt. Its debt equals 0.5% of its market value, against 21% for the S&P 500. So an end to the shortage would change how much Micron earns, not whether it can pay its way.
Management does not expect the shortage to end soon. Ending the shortage would take new supply arriving faster than demand grows, and Micronâs own Idaho facility is due to produce its first wafers in mid-2027. Micron guided a gross margin of 85.95% at the midpoint for fiscal Q1 2027. A reported margin for that quarter clearly below the guide would be the first sign of the margin slipping from what management expects.
Micronâs Gross Margin Has Nearly Doubled In A Year
Seriously enough, because the profit Micron earns today is new. Its gross margin was 73% over the latest twelve months, against 37% a year earlier. The year before that it was 11.4%, and Micron lost money two and three years ago.
On the September 30 call, management was asked whether margins would change in 2028 from the level it implied for 2027. Management answered that it expects the market to stay tight through 2028, though start-up costs would partly offset higher prices. Its own first-quarter guidance already factors in a double-digit change in cost for both DRAM and NAND memory chips.
What Micron Would Earn At Last Yearâs Margin
Micron would earn far less than it does now. It kept 55.9% of its revenue as net income over the latest twelve months, against 18.4% a year earlier. At that earlier margin, the same $90.3 billion of revenue would have produced about $16.6 billion of profit. Micron actually earned $50.5 billion. Lower prices would also mean lower revenue, so that sum is on the generous side.
You pay 24.0 times earnings for the stock, against 21.5 for the S&P 500, but that multiple is on the profit of the latest twelve months. And Micron stock has fallen harder than the market when investors turned cautious. It lost 49% in the 2022 inflation shock, against 24% for the S&P 500.
If Prices Turn, Micron Has Contracts And Cash
More than 75% of Micronâs shipments for the year are already committed, management said. Micron has also signed long-term agreements with customers. About three quarters of the revenue under them has a defined pricing framework, mostly with a floor and a ceiling. The other quarter is open to negotiation or moves with market prices.
Its finances would not be in question either. Micron holds $19.6 billion more cash than debt. Its debt equals 0.5% of its market value, against 21% for the S&P 500. So an end to the shortage would change how much Micron earns, not whether it can pay its way.
Management does not expect the shortage to end soon. Ending the shortage would take new supply arriving faster than demand grows, and Micronâs own Idaho facility is due to produce its first wafers in mid-2027. Micron guided a gross margin of 85.95% at the midpoint for fiscal Q1 2027. A reported margin for that quarter clearly below the guide would be the first sign of the margin slipping from what management expects.