Micron now earns more than Apple! Apple urgently needs chips, Micron holds pricing power.

A memory shortage is reshaping the profit landscape of the tech industry. Micron Technology recorded a net profit of $37.7 billion in its fourth fiscal quarter ending September 30, whereas Apple’s net profit for the same period was $29.8 billion—Micron earned about $8 billion more in a single quarter.

This turnaround is no coincidence. Market strategist Charlie Bilello summed up the logic in three sentences on X: "Apple needs chips. Micron has chips. Micron sets the price."

He added that Micron’s net profit "soared 42 times to $38 billion in just two years—$8 billion more than Apple’s profit last quarter," and bluntly stated: "We have never seen such pricing power."

Technology investment analyst Beth Kindig also pointed out on X: "Micron is now generating more operating profit than Apple."

Micron’s Numbers: From the Brink of Losses to Surpassing Apple

The speed of Micron's profit turnaround is astonishing.

In fiscal year 2024, Micron’s standardized earnings per share were only $1.30. By fiscal year 2026, this figure is set to jump to $75.52. Among 35 analysts covering fiscal year 2027, the average earnings per share forecast is $176.15—meaning profits will more than double again in just one year.

Josh Brown, CEO of Ritholtz Wealth Management, commented publicly on Micron's performance guidance: "Not only has it not been lowered, it is actually being revised upwards constantly."

Micron projects revenue for the first quarter of fiscal year 2027 to reach $61.5 billion, up from the recently reported $54.2 billion. CEO Sanjay Mehrotra told CNBC even more directly: "In fact, we simply cannot meet customer demand."

Apple’s Price: Gross Margin Under Continuous Pressure

Micron’s pricing power is directly reflected in its clients' bills.

Previously, Apple had built up a significant buffer due to its steadily expanding gross margin—from 41.8% in fiscal year 2021, rising each year to 46.9% in fiscal year 2025.

But this buffer is now being eroded. Excluding the impact from tariff refunds, Apple’s gross margin fell from 49.3% in the March quarter to 48.1% in the June quarter, with guidance for the September quarter to drop further to around 46.5%. Apple’s management explicitly stated that memory costs were the main reason for the gross margin decline in the June quarter, and remain the driving factor for further pressure in September; moreover, the buffer from previously accumulated inventory will gradually fade after September.

Former Apple CEO Tim Cook described the rise in memory prices as a "once in a century flood" during the July earnings call.

Apple is not the only major buyer under pressure. John Armitage, co-founder of Egerton Capital, named Nvidia on the "In Good Company" podcast: "One big issue for Nvidia is memory cost inflation and its impact on material expenses." However, he also noted that Nvidia’s 75% gross margin allows much more room to absorb shocks than Apple has.

Valuations: The Market Still Discounts Micron

Despite a dramatic surge in profitability, Micron’s valuation remains sluggish.

Currently, Micron’s forward price-to-earnings (P/E) ratio is 5.9 times, well below the three-year average of 10.5 times.

The market’s discount reflects uncertainty about whether this supercycle can last. But according to TIKR analysis, as long as demand continues to outstrip supply, Micron’s pricing power will not disappear. Apple’s next earnings report is expected in late October, when whether memory costs remain elevated will be a key signal for the market.

There are questions over how long Micron’s pricing power can last.

According to Reuters, Micron’s Taoyuan, Taiwan factory union has 1,994 members (99% of voting members) who have authorized a strike due to a bonus dispute. Taiwan is an important production base for Micron’s DRAM and HBM.

However, a strike authorization vote does not mean an immediate walkout—the union said that the timing and details are still under discussion. Moreover, even if workers were to go on strike, it would only further tighten already scarce supply, which would be unfavorable for Apple’s memory bill.

On Apple’s side, they will release their first foldable phone, iPhone Duo, on October 23, priced at $1,999. This may help Apple pass some cost pressures onto consumers—but according to Apple’s own guidance, it is still absorbing these expenses itself for now.