Micron's Data Center Revenue Grew 653% and Reset What MU Is

The Catalyst

Micron reported fiscal Q3 2026 results after Tuesday's close, and the numbers cleared the bar by a wide margin. Non-GAAP EPS of $25.11 against a ~$20.28 consensus is a roughly 24% beat, on revenue of $41.46 billion versus about $35.25 billion expected. The line that matters most for a historically cyclical memory maker: a gross margin near 85%, up from 39% a year ago. Shares jumped about 14% in after-hours trade toward $1,194, and the Hyperliquid perp ran ~20% as it tracked the extended-session bid.

Data Center Is the Whole Story Now

Strip out the headline and the engine is obvious. Data center revenue hit $11.52 billion, up 653% year over year — by far the fastest-growing unit — at an 87% gross margin, with data center SSDs alone clearing $5 billion. This is the part that reprices the stock. Micron is no longer just selling commodity DRAM into PC and handset cycles; it's selling high-bandwidth memory into AI buildouts, and management says supply stays tight beyond 2027. HBM capacity for 2026 is already sold out under fixed-price contracts, which is why the revenue line carries visibility a memory company almost never gets.

Why the Street Doubled Its Targets

The guide did the rest. Micron pointed Q4 to $50 billion in revenue and roughly $31 in EPS at an 86% gross margin — numbers that would have read as fantasy a year ago. Analysts responded by tearing up their models: Bank of America moved to a $1,500 target, with UBS at $1,625, TD Cowen jumping from $660 to $1,500, and RBC and Raymond James landing at $1,200 and $1,100. The dispersion is the tell — the argument is no longer cyclical-versus-structural, it's how high the structural number runs. MU had already gained around 260% year to date into this print, so the market is re-rating a name that was already a monster.

Reading the Perp

One note for perp traders: the 20% figure is the Hyperliquid market's own 5-hour move, and it outpaces the ~14% after-hours reaction in spot. With the cash market closed, the perp is the only live venue pricing the print, so it carries a small premium to the last spot prints near $1,194 and absorbs the full extended-hours bid. The $629 million in 24-hour volume on this market is real liquidity, but expect the basis to compress when regular-hours trading reopens and spot catches up to where the perp has already marked.