Analysts boldly predict that Micron (MU.US)'s profit for the 2027 fiscal year is expected to surpass Microsoft's (MSFT.US) storage price as a winner and loser

The Zhitong Finance App learned that it is expected to make a net profit of 35 billion US dollars in one quarter. Will Micron (MU.US)'s profit surpass Microsoft (MSFT.US)? According to Micron's latest guidelines, net profit for the fourth quarter of fiscal year 2026 may reach approximately US$35 billion. At this pace, it could surpass Microsoft's profit for the 2027 fiscal year. But only if the storage price holds up.

For Microsoft, the 2026 fiscal year ending June 30 is the strongest year in the software giant's history: revenue increased 18% to US$331.8 billion, and net profit increased 31% year-on-year to US$133.7 billion.

Micron is approaching this figure in a different way. The memory chip maker's net profit for fiscal year 2025 was $8.5 billion. However, Micron management's guidance for the fourth quarter of fiscal year 2026 (up to the beginning of September) is that GAAP diluted earnings per share were $30.73, fluctuating up and down by $1.00. Based on about 1.15 billion diluted shares, this guideline is equivalent to a profit of about 35 billion US dollars in a single quarter, which is about four times that of the full year of the previous fiscal year.

Daniel Sparks, an analyst at The Motley Fool, predicts that Micron's profit will surpass Microsoft by the 2027 fiscal year. This is a bold decision that relies almost entirely on the price of storage.

Micron's net profit sword for a single season is $35 billion

Micron's net profit for the second quarter of fiscal year 2026 was $13.8 billion. By the third fiscal quarter (ending May 28, 2026), net profit had reached US$28.2 billion. According to the latest guidelines, net profit will increase by about 25% on this basis, which is a slowdown from the month-on-month increase of more than 100% in the previous quarter. The growth rate is slowing, but net profit continues to grow.

Price, not sales, is the key. Micron Technology's latest quarterly earnings report shows that the average sales price of DRAM rose by more than 60% month-on-month, while shipments only increased by a low single-digit percentage. The gross margin rose from 37.7% in the same period last year to 84.6% in the third fiscal quarter. In other words, the company's storage sales increased only slightly from the previous quarter, but prices rose sharply.

Micron will announce its fourth fiscal quarter results on September 30. The market generally expects revenue of $51.1 billion for the quarter and earnings per share of $31.47.

The two companies use different fiscal year calendars. Microsoft's 2027 fiscal year starts in July and lasts until next June; Micron's 2027 fiscal year starts in early September and lasts until around August next year.

At the guideline rate, Micron's profit for the four quarters will total approximately US$141 billion. This will exceed Microsoft's profit for fiscal year 2026 — it is worth mentioning that the $133.7 billion announced by Microsoft includes approximately $5 billion in OpenAI investment income.

But the real threshold is higher. First, Micron's quarterly results guidance covers 14 weeks instead of the usual 13 weeks, because FY2026 has 53 weeks. Considering this extra week, the annualized profit corresponding to this guideline is about 131 billion US dollars based on a normal 52-week cycle.

And Microsoft won't stand still. Even if the tech company's profit growth slows to half of FY2026's 31%, it could still reach around $154 billion in FY2027.

Taken together, to achieve this goal in fiscal year 2027, Micron will need to generate an average net profit of about 38 billion to 39 billion US dollars per quarter, which is about 10% higher than the target quarter, and still less than a week.

The storage price is the winner and loser

Micron doesn't need a further spike in storage prices to cross this threshold. However, it is true that storage prices still need to stay close to record highs while increasing sales. The company is investing heavily in expanding production and has signed a multi-year non-negotiable agreement to bind customers to purchase a fixed amount.

“We believe our multi-year strategic client agreement will significantly enhance the durability and predictability of Micron's strong financial performance,” Micron CEO Sanjay Mehrotra said in the fiscal third quarter earnings report.

Of course, storage prices have also shown the opposite trend before. In fiscal year 2023, oversupply nearly halved Micron's revenue to US$15.5 billion and generated a net loss of US$5.8 billion. Even a slight drop in price could disappoint the entire forecast.

Storage price isn't the only factor to look out for. The media reported in mid-September that the trade union representing most of Micron's employees in Taiwan has been promoting profit sharing plans and is continuing preparations for the strike. Taiwan is Micron's largest manufacturing center. So far, no strike has been initiated, and production has not been affected.

Even so, The Motley Fool believes the situation is beneficial to Micron. There is no need for further price increases, but a sharp fall must be avoided. According to Micron's latest quarterly documents, most of these agreements set fixed prices or upper and lower price limits, which can provide a buffer if prices fall.

The Motley Fool believes that as long as storage prices hold up, Micron's profit for the 2027 fiscal year will surpass Microsoft by a narrow margin. But after all, it's a profit ranking, not a stock recommendation. Microsoft's market capitalization is about 3.5 times that of Micron, and the storage industry's profits have historically been more volatile and less sustainable.