Micron could surpass Nvidia as top driver of S&P 500 profit growth

Micron Technology, the Idaho-based DRAM and NAND manufacturer, already surpassed Nvidia as the largest contributor to S&P 500 earnings growth in Q2 2026, posting year-over-year profit expansion north of 1,200%.

The numbers behind the surge

Micron’s fiscal Q3 2026 results were staggering by any standard. Revenue hit $41.46 billion, up 346% from the same quarter a year earlier. Net income landed at $28.24 billion. Gross margins reached 84.9%.

For fiscal Q4 2026, the company is forecasting roughly $50 billion in revenue with an 86% gross margin.

Looking further ahead, analysts project Micron’s operating income could climb from approximately $130.4 billion in 2026 to $200.8 billion in 2027, a 54% jump. That would rank the company third in total contributions to S&P 500 profit growth, trailing only Nvidia and Alphabet.

Together, Micron and Nvidia accounted for up to 40% of the S&P 500 index’s earnings growth in the most recent quarter.

Why memory became the bottleneck

Micron has locked in long-term supply agreements with key customers, including Nvidia itself.

Industry-wide DRAM and NAND growth rates are guided in the low-to-mid 20s percent and roughly 20% respectively for calendar 2026. Micron’s growth is running far ahead of the broader memory market, suggesting it’s capturing disproportionate share of the highest-margin AI memory products.

Supply constraints in HBM are expected to persist beyond 2027.

The valuation gap that won’t close

Micron’s stock trades at a forward price-to-earnings ratio of approximately 9.2x. The S&P 500’s weighted average forward P/E sits around 20.2x. The information technology sector averages 22.8x. Micron is trading at less than half the multiple of its own sector, despite growing faster than nearly every company in the index.

Disclosure: This article was edited by Diego Almada Lopez. For more information on how we create and review content, see our Editorial Policy.