Micron fell 2% in Thursday morning trading after telling investors fiscal Q1 gross margins will be pressured even though demand for memory and storage chips remains strong.
Q1 margins are taking a hit from higher fiscal 2026 manufacturing-related compensation, CFO Mark Murphy said, after the company absorbed most of that increase in Q4.
Murphy said Q1 should mark a new gross-margin floor, with margins expected to rise again afterward as price increases moderate.
Micron has signed 26 strategic customer agreements expected to account for more than 35% of revenue through 2030, giving it protection against the memory industry's usual boom-and-bust swings.
The pullback comes after a roughly 280% run in Micron shares this year, as investors focus less on AI-driven demand and more on how durable peak profitability will be.