Micron Technology (MU) is about to face its biggest test of the year. The company did not have to say a word to give investors a preview of what is coming — two of its most important neighbors in the memory supply chain already did the talking.
When a company reports fiscal fourth-quarter results on Sept. 30 against a backdrop of record memory prices, comments from customers and rivals sitting on either side of it carry almost as much weight as the firm’s own guidance.
What Nvidia’s earnings call revealed about memory
Nvidia’s (NVDA) own numbers set the tone.
On its fiscal second-quarter earnings call on Aug. 26, CFO Colette Kress told investors the company is seeing “extreme pricing conditions in memory,” adding that “the magnitude of the price increase has exceeded our prior expectations and [is] headed even higher into next year,” CNBC reported.
That pricing pressure is already showing up in Nvidia’s margins. Kress guided gross margin to bottom out in the 71% to 72% range in the fourth quarter before recovering to 72% to 73% in fiscal 2028, once Nvidia’s own repriced products begin offsetting higher input costs, according to Yahoo Finance.
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Kress also framed the squeeze in a way that points directly to Micron’s opportunity.
“Memory scarcity today is being driven in large part by the AI buildout itself,” she said, describing the tight supply not as a headwind to Nvidia’s business but as a byproduct of the same demand surge driving Nvidia’s own growth.
SK Hynix adds to the shortage signal
Nvidia is not alone in flagging the squeeze. SK Hynix (SKHY), the current leader in high-bandwidth memory, does not anticipate the memory market reaching supply-demand balance until 2030 at the earliest.
The timeline suggests Micron’s pricing tailwind could have years of runway left, CNBC reported.
The company has been putting real money behind that outlook. SK Hynix committed roughly $38.3 billion to expand two domestic South Korean sites through 2031, split between a HBM and next-generation DRAM fab in Yongin and a new NAND plant in Cheongju.
This investment reflects the company’s view that the AI-driven cycle is structural rather than another boom-bust swing, CNBC reported.
SK Hynix’s dominance in the highest-margin part of the market makes its confidence especially notable. The company holds roughly 50% of the high-bandwidth memory market. It’s well ahead of Samsung at 33% and Micron at 18%, meaning SK Hynix has the clearest view into how tight demand for AI memory actually is.
How this sets up Micron heading into earnings
Micron’s own recent numbers already show the pricing story translating into results. The company has sold out its high-bandwidth memory supply for 2026 and started development of next-generation HBM4E devices. This comes even as memory chip prices nearly doubled in the first quarter and were expected to rise sharply in the fiscal second quarter.
That momentum has pushed Wall Street to keep raising expectations. Morgan Stanley more than doubled its price target on Micron to $1,050 from $520 earlier this year, citing tight memory supply and booming AI demand.
Dell’s raised AI server sales forecast provided another potential tailwind for Micron’s business, TheStreet reported.
Not every price target has kept climbing in a straight line. BMO Capital started coverage on Micron at an Outperform rating with a $1,300 target in August, even as Citi trimmed its own target to $1,150 on concerns that DRAM and NAND pricing could soften by 2027.
It serves as a reminder that memory remains a cyclical business, even during a historic upswing, according to TheStreet.
The bottom line for Micron investors
What makes Micron’s setup unusual is the gap between its growth rate and its valuation. The stock has already climbed past a $1 trillion market valuation this year on the strength of its high-bandwidth memory business, yet it still trades at just 6.6 times forward earnings.
This represents a steep discount next to the S&P 500’s forward multiple of 21, despite Micron’s exceptional earnings growth.
The discount partly reflects that investors have been burned before by memory’s boom-and-bust history. Some of that skepticism, echoed in Citi’s more cautious 2027 pricing outlook, is not unreasonable, given how quickly the cycle has turned in the past.
Still, with Nvidia describing memory pricing as extreme and still rising, and SK Hynix not expecting balance until 2030, the signals pointing into Micron’s Sept. 30 report lean firmly toward another quarter of numbers that could surprise to the upside.
That could leave the stock’s low valuation looking increasingly out of step with its underlying growth.
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