Micron Technology posted a gross margin of 84.9 percent in the fiscal third quarter, vaulting past Nvidia and Meta to claim the highest profitability ratio among major U.S. technology companies as a memory shortage hands the chipmaker unprecedented pricing power.
The figure, disclosed alongside better-than-expected earnings on Wednesday, more than doubled from 39 percent a year earlier and rose from 74.9 percent in the prior period, Chief Financial Officer Mark Murphy told analysts. It leaves Meta's latest 81.9 percent margin and Nvidia's 75 percent behind, a striking turn for a business long treated as a commodity supplier.
Revenue surged to $41.46 billion, up more than $20 billion from the previous quarter, itself a record in Micron's 48-year history, while net income of $28.24 billion more than doubled the prior peak set last quarter. Shares have climbed over 700 percent in the past year, pushing the market capitalization past $1 trillion, and added another 14 percent in extended trading Wednesday. Nvidia, by comparison, commands a market value close to $5 trillion.
Nvidia, whose graphics processors became the backbone of artificial intelligence infrastructure, had previously set the pace with a gross margin that peaked near 79 percent in early 2024. Among other megacaps, Broadcom sits at 69.5 percent, Microsoft at 67.6 percent and Alphabet at 62.4 percent. Rival SanDisk reported 78.4 percent in late April, up from 51.1 percent in the prior period.
Micron is locking in the gains through long-term strategic customer agreements with price floors that Chief Executive Sanjay Mehrotra said enable margins well above any past cycle peak. The company guided for roughly 86 percent gross margin in the fiscal fourth quarter and Murphy said he expects the market to remain tight beyond 2027. The scarcity is rippling through the supply chain: Apple Chief Executive Tim Cook told the Wall Street Journal last week that the iPhone maker will have to raise prices to cope with a memory situation he called unsustainable. Susquehanna analyst Mehdi Hosseini, who recommends the stock, told CNBC that customers have no choice but to pay a premium as the "memory wall" plays out, a turn for an industry he said has been out of favor for three decades.