As Micron Technology's guidance for the fourth quarter of fiscal year 2026 (June–August) released on the 25th eased market concerns, the "AI demand slowdown" worries that rattled Samsung Electronics and SK hynix have further subsided. Some investment banks (IBs), including Bernstein, are using this earnings release as a cue to raise estimates not only for Micron but also for Samsung Electronics and SK hynix.
The concern started with the sharp sell-off in tech stocks that hit the U.S. stock market the day before. As SK hynix, the leading player in artificial intelligence (AI) memory, appeared set to moderate the pace of its shift to sixth-generation high bandwidth memory (HBM4) production, the market grew skeptical that Big Tech's AI infrastructure investment might be slowing. Doubts began to emerge about the sustainability of the memory boom that had driven earnings improvements at Samsung Electronics and SK hynix over the past year. Against this backdrop, Micron's outlook for the second half of this year became a test of the sustainability of the super-boom in memory.
◇ Micron's second-half outlook beats market expectations
On its earnings conference call, Micron posted figures that once again topped the market's already lofty expectations. Last quarter's revenue was $41.456 billion, far above the consensus of $35.59 billion, and guidance for fourth-quarter fiscal year 2026 revenue was set at $50 billion (±$1 billion), well above the $38 billion that had been cited as a minimum baseline. The result lends weight to experts' views that the memory supply shortage will be difficult to resolve until next year.
This is naturally feeding into higher earnings expectations for Samsung Electronics and SK hynix. Earlier, Bernstein simultaneously raised its outlooks for Samsung Electronics, SK hynix and Micron, and Micron's latest results appear to support that judgment. Domestic brokerages are moving similarly. Hana Securities raised its 2027 operating profit forecast for Samsung Electronics by 8%, citing higher-than-expected mobile DRAM prices. Eugene Investment & Securities also revised up its earnings outlook for SK hynix.
Another key driver of the upward revisions for Samsung Electronics and SK hynix is the sharp rise in prices of commodity DRAM, which looks even more striking than HBM. Kim Dong-Won, head of research at KB Securities, estimated SK hynix's second-quarter operating profit this year at 67 trillion won, up sevenfold from a year earlier, with an operating margin of 77.6%. Nomura Securities also noted that memory makers are discussing favorable long-term agreements (LTAs) with major customers on volume, price and prepayments, and projected that Samsung Electronics and SK hynix will see their operating profits this year increase by about sevenfold from a year earlier.
◇ "AI boom's sustainability confirmed"… AI bubble theory subdued by the numbers
Observers say Micron's results amount to more than a simple "earnings surprise." As semiconductor corporations have heated up stock markets at home and abroad, the industry had worried about a scenario in which market growth would cool alongside a slowdown in AI infrastructure investment. But Micron's guidance effectively sent the signal that "the party is still in full swing."
Some also interpret the long-term agreements (LTAs) that memory makers have signed with major customers such as Nvidia, Google and Microsoft (MS) as making it hard to call the end of the boom. Nomura Securities said, "As memory corporations shift their supply contract structures to LTAs, the high-margin structure has gained stability," raising the possibility that the current boom is not temporary but could extend into the medium to long term.
Meanwhile, brokerages expect the recent rise in commodity memory prices to begin to be fully reflected in second-quarter results for Samsung Electronics and SK hynix, to be announced in July, with the effect becoming even clearer in the third quarter. A semiconductor industry official said, "The spot price rally is so steep that it is hard to forecast the two corporations' operating profits based on DRAM and HBM price trends alone," adding, "On top of that, various factors such as LTAs, advance payments and premiums will be reflected in the two companies' results."