Micron Technology Raises Capex Guidance Amid Strong Earnings
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 9 hours ago
0mins
Should l Buy LRCX?
Source: NASDAQ.COM
- Significant Earnings Growth: Micron Technology reported a revenue of $23.9 billion for Q2 FY2026, nearly tripling year-over-year, with a non-GAAP operating margin soaring from 25% to 69%, highlighting robust market demand and price increases that further solidify its leadership in the memory market.
- Increased Capex Guidance: The company now expects its fiscal 2026 capital expenditures to exceed $25 billion, significantly up from the $20 billion estimate made in December 2025, reflecting its urgency to meet customer demand, particularly in the context of sustained AI-driven high-bandwidth memory demand.
- Equipment Procurement Plans: Micron plans to boost investments in cleanroom facilities to support memory chip production and procure additional equipment, which will not only enhance production capacity but also create substantial growth opportunities for its partner, Lam Research.
- Lam Research Benefits: With Micron's increased capital spending, Lam Research's stock has tripled over the past year, and analysts expect its earnings per share to jump by 28% this fiscal year, followed by a further 30% increase next year, demonstrating the positive impact of memory infrastructure investments on its performance.
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Analyst Views on LRCX
Wall Street analysts forecast LRCX stock price to fall
22 Analyst Rating
18 Buy
4 Hold
0 Sell
Strong Buy
Current: 211.410
Low
142.00
Averages
192.50
High
265.00
Current: 211.410
Low
142.00
Averages
192.50
High
265.00
About LRCX
Lam Research Corporation is a global supplier of wafer fabrication equipment and services to the semiconductor industry. The Company designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used in the fabrication of integrated circuits. Its products and services are designed to help its customers build devices that are used in a variety of electronic products, including mobile phones, personal computers, servers, wearables, automotive vehicles, and data storage devices. Its product families include ALTUS, SABRE, SPEED, Striker, VECTOR, Flex, Vantex, Kiyo, Versys Metal, Syndion, Coronus, and DV-Prime, Da Vinci, EOS, and SP Series. Its customer base includes semiconductor memory, foundries, and integrated device manufacturers that make products such as non-volatile memory, dynamic random-access memory, and logic devices. It offers services in areas, such as nanoscale applications enablement, chemistry, plasma and fluidics, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Increased Capex Guidance: The company now expects its fiscal 2026 capital expenditures to exceed $25 billion, significantly up from the $20 billion estimate made in December 2025, reflecting its urgency to meet customer demand, particularly in the context of sustained AI-driven high-bandwidth memory demand.
- Equipment Procurement Plans: Micron plans to boost investments in cleanroom facilities to support memory chip production and procure additional equipment, which will not only enhance production capacity but also create substantial growth opportunities for its partner, Lam Research.
- Lam Research Benefits: With Micron's increased capital spending, Lam Research's stock has tripled over the past year, and analysts expect its earnings per share to jump by 28% this fiscal year, followed by a further 30% increase next year, demonstrating the positive impact of memory infrastructure investments on its performance.
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- Declining Bond Yields: The 10-year T-note yield dropped by 8 basis points to 4.34%, reflecting market fears that the ongoing war in the Middle East could lead to fuel shortages, potentially suppressing expectations for Fed rate hikes and highlighting economic growth uncertainties.
- Rising Crude Oil Prices: Crude oil prices surged over 3% to a three-week high due to Iranian attacks on the Strait of Hormuz, indicating severe threats to global energy supply chains, which could lead to soaring prices in the future and impact the global economy.
- Weak Manufacturing Activity: The Dallas Fed manufacturing activity survey fell to -0.2, below the expected 2.0, reflecting signs of economic slowdown that could influence corporate investment decisions and future economic growth.
See More
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- Escalating Middle East Tensions: US and Israeli forces continue military operations in Iran, with the Pentagon preparing for weeks of ground operations as approximately 3,500 sailors and Marines arrive in the region, potentially exacerbating global energy supply issues.
- Positive Bond Market Reaction: The 10-year Treasury yield fell to 4.330% as speculation grows that the ongoing conflict in the Middle East may lead to fuel shortages, offsetting inflation fears and supporting Treasury prices amid declining inflation expectations.
See More
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- Margin Expansion: The company's non-GAAP operating margin skyrocketed from 25% to 69%, primarily due to persistent increases in memory prices and supply constraints, indicating successful strategies in cost control and market pricing.
- Capital Expenditure Increase: Micron anticipates its fiscal 2026 capex to exceed $25 billion, significantly higher than the previous estimate of $20 billion, reflecting a strong commitment to meeting customer demand and laying the groundwork for future growth.
- Positive Impact on Equipment Manufacturers: Micron's robust performance is likely to positively influence semiconductor equipment manufacturer Lam Research, which derived 34% of its revenue from memory chipmaking equipment last quarter, suggesting it will benefit from Micron's increased capital spending and growing market demand.
See More
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- Rising Oil Prices: Crude oil prices surged over 2% to a three-week high due to disruptions in oil and gas flows through the Strait of Hormuz caused by the Iran conflict, which could negatively impact global economic growth.
- Weak Manufacturing Activity: The Dallas Fed manufacturing activity index dropped from -0.4 to -0.2, falling short of the expected increase to 2.0, suggesting challenges in economic recovery that may influence future policy decisions.
- Escalating International Tensions: U.S. and Israeli military actions against Iran have intensified, with 3,500 sailors and Marines deployed to the Middle East, potentially leading to further volatility in energy markets and impacting global supply chains.
See More
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- Significant Earnings Growth: Micron Technology reported a revenue of $23.9 billion for Q2 FY2026, nearly tripling year-over-year, with a non-GAAP operating margin soaring from 25% to 69%, highlighting robust market demand and price increases that further solidify its leadership in the memory market.
- Increased Capex Guidance: The company now expects its fiscal 2026 capital expenditures to exceed $25 billion, significantly up from the $20 billion estimate made in December 2025, reflecting its urgency to meet customer demand, particularly in the context of sustained AI-driven high-bandwidth memory demand.
- Equipment Procurement Plans: Micron plans to boost investments in cleanroom facilities to support memory chip production and procure additional equipment, which will not only enhance production capacity but also create substantial growth opportunities for its partner, Lam Research.
- Lam Research Benefits: With Micron's increased capital spending, Lam Research's stock has tripled over the past year, and analysts expect its earnings per share to jump by 28% this fiscal year, followed by a further 30% increase next year, demonstrating the positive impact of memory infrastructure investments on its performance.
See More
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- Market Volatility: The S&P 500 struggled to maintain gains at the start of the holiday-shortened trading week, initially rising after President Trump's comments on the Iran war but subsequently falling, with the tech-heavy Nasdaq leading the decline, indicating market uncertainty.
- Oil Price Impact: U.S. West Texas Intermediate crude oil prices rose over 3% to above $100 per barrel; however, despite this typically leading to higher bond yields, the 10-year Treasury yield fell about 10 basis points to 4.32%, reflecting a cautious market response to short-term energy cost spikes.
- TJX Dividend and Buyback: TJX Companies announced a 14% increase in its quarterly dividend to $0.48 per share and plans to repurchase approximately $2.5 billion to $2.75 billion of stock in the current fiscal year, signaling confidence in future earnings and cash flow growth, despite a modest dividend yield of 1.2%.
- Strong Long-term Performance: TJX shares have risen 298% over the past decade, with a total return of 358% when including reinvested dividends, demonstrating the company's consistent execution and off-price model's effectiveness in attracting value-seeking shoppers.
See More
