Micron turns one quarter's cash into a record $35 billion buyback
The board sized the October 8 authorization at 100% of one quarter's adjusted free cash flow, with $150 billion of customer contracts running behind it to 2030. Memory's cycle history, China's supply push and its customers' borrowing costs argue the other way.
Vincent Jiang · 3 min read
One quarter's cash, pledged to shareholders
Micron's−6.00% — Micron, down 6.00 percent today board voted on October 8 to authorize $35.16 billion of share buybacks, the largest repurchase ceiling in the memory maker's history, and disclosed it the next day in its annual report 12. For a Micron holder, the authorization is the board's vote that this cycle is different.
The number is built from $2.16 billion left over from the 2018 program plus 100% of adjusted free cash flow from the quarter ended September 3, after subtracting proceeds from CHIPS Act grants, the US federal chip-subsidy program, and dividends 23. The authorization is, in effect, one quarter's entire cash haul 1.
The scale is new for a company that spent $7.84 billion on buybacks across all of fiscal 2019 through 2026 1. The CHIPS terms, tied to as much as $6.4 billion of grants for Micron's US fabs, limited repurchases to offsetting employee stock awards for two years, which is why buying starts December 9, 2026, and stays capped against free cash flow for three years after 12.
Micron's quarterly revenue went from $4.7B to $54.2B in eleven quarters
Data
| Quarterly revenue | |
|---|---|
| Q4 '23 | $4.73B |
| Q1 '24 | $5.82B |
| Q2 '24 | $6.81B |
| Q3 '24 | $7.75B |
| Q4 '24 | $8.71B |
| Q1 '25 | $8.05B |
| Q2 '25 | $9.3B |
| Q3 '25 | $11.32B |
| Q4 '25 | $13.64B |
| Q1 '26 | $23.86B |
| Q2 '26 | $41.46B |
| Q3 '26 | $54.23B |
The quarter that wrote the check
The September quarter delivered $54.23 billion of revenue, up 379% year over year, at an 86.8% gross margin 28. It left $33.2 billion of adjusted free cash flow, the cash remaining after capital spending, up from $803 million a year earlier 1. Fiscal 2026 closed with $133.19 billion of revenue, $84.97 billion of net income and average DRAM selling prices up about 180% across the year 23.
Underneath sits the contract book: 26 agreements, roughly $150 billion of remaining performance obligations through 2030, covering more than 35% of expected revenue 4. The deals are take-or-pay, meaning customers owe for the contracted volumes even if they end up not needing the chips 4. Contractual price floors, per finance chief Mark Murphy, sit "meaningfully above any prior cycle peak margins" 4.
Elon Musk posted this week that Micron "has been reasonable regarding future memory prices, while others have been extortionate" 45. Samsung, days earlier, estimated a record 107.4 trillion won, about $80.2 billion, in quarterly operating profit 6. SK Hynix−6.61% — SK Hynix, down 6.61 percent today, the third big memory maker alongside Micron and Samsung, announced a 40 trillion won buyback in August 7.
Micron's gross margin has gone from negative to 86.8% in eleven quarters
Data
| Gross margin | |
|---|---|
| Q4 '23 | -0.7% |
| Q1 '24 | 18.5% |
| Q2 '24 | 26.9% |
| Q3 '24 | 35.3% |
| Q4 '24 | 38.4% |
| Q1 '25 | 36.8% |
| Q2 '25 | 37.7% |
| Q3 '25 | 44.7% |
| Q4 '25 | 56% |
| Q1 '26 | 74.4% |
| Q2 '26 | 84.6% |
| Q3 '26 | 86.8% |
The cycle has done this before
Eleven quarters ago the same company posted a negative gross margin 8. The market is already pricing the turn: the stock fell about 4% the first trading day after the filing and sits 21% below its June peak, even as conventional DRAM contract prices are forecast to rise another 10% to 15% this quarter 2369.
Musk spent the same week praising China's progress on LPDDR5 and LPDDR6, the mobile memory supply that would end the shortage 45. The buyers' lenders are flinching too: bonds issued in June by CoreWeave−12.18% — CoreWeave, down 12.18 percent today, an AI data-center operator whose buildout is debt-funded, have gone from a 9.675% yield to 15%, which 9fin analyst Max Frumes called "the canary in the coal mine" for AI credit 10.
December 9 is the marker: first purchases under the new ceiling, against a December-quarter revenue guide of about $61.5 billion and Murphy's promise of free cash flow "significantly higher" than the last quarter's 1211. The UBS bull case sees more than $400 billion of cumulative free cash flow through 2029 11; the cycle case is the margin chart above. Micron, Samsung and SK Hynix are all banking the boom's cash, while the cloud companies buying their chips borrow to do it.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
