NEW YORK, June 27, 2026, 05:45 (EDT)
- Micron’s surprise has shifted index earnings estimates just ahead of the main Q2 season.
- Customer cash commitments are big, but they don’t show up in free cash flow.
- Chip stocks kept falling into the weekend.
- Nike NYSE:NKE is set to headline a quiet earnings week, with trading slowed by the holiday.
Micron Technology NASDAQ:MU topped forecasts this week. The company’s results shifted the S&P 500 earnings picture before the bulk of Q2 numbers were out.
Micron’s $25.11 EPS, topping the $20.86 forecast, drove the S&P 500’s Q2 earnings growth estimate up to 23.1% from 22.2%, FactSet said. FactSet also noted 57% of S&P 500 companies providing Q2 EPS guidance were positive, well above the five- and 10-year averages of 41%. The S&P 500 trades at 20.1 times forward 12-month earnings, higher than its 10-year average of 19.0. factset.com
Cash drew some attention. Micron said it holds 16 strategic customer agreements, totaling around $22 billion in cash deposits and other commitments. CFO Mark Murphy said $18 billion of that will show up as cash deposits, but counted among financing-related cash flows. They won’t impact free cash flow, and Micron will repay those deposits to customers when contracts end.
Micron’s commitments are still a big deal, at roughly 53% of its fiscal Q3 revenue and 2.2x projected Q4 capex. They offer Micron funding cushion and supply certainty, but it’s not the same as operating cash. That’s where investors are focused.
Micron’s quarter was all about prices. Fiscal Q3 revenue hit $41.5 billion, up 74% on the quarter and up 346% from last year. DRAM drove most of that, with $31.3 billion, making up 76% of total revenue. DRAM prices climbed in the low-60% range, but bit shipments barely moved, rising only in the low-single digits. NAND revenue reached $9.9 billion. NAND prices jumped in the mid-80% range, with bit shipments up mid-single digits.
Chip stocks didn’t get much lift out of the memory rally by Friday. The PHLX chip index dropped 5.3% on Friday and finished the week down 7.9%, its worst showing since early April. The Nasdaq fell 4.7% on the week. “Questions around profitability and the capex story are certainly not going away,” said David Stubbs, chief investment strategist at AlphaCore Wealth Advisory. Reuters
Micron CEO Sanjay Mehrotra expects “tight conditions to persist beyond calendar 2027.” Daniel Newman, CEO at Futurum Group, echoed that outlook, saying, “memory will continue to command premium pricing.” But Jake Behan at Direxion had a different view. He said “pricing power is the first thing at risk” if supply returns. Reuters
Investors faced a familiar issue in other earnings over the last 48 hours: profits came from pricing and not demand. McCormick NYSE:MKC reported a beat on profit, with prices gaining 2.2% but volumes dropping 0.5%. Tariff refunds reduced cost of goods sold by $28 million. Reuters
This matters for investors because they want earnings that move the market. Micron’s beat, coming from memory pricing and customer deposits, is strong, but it’s not the same as wide unit growth. McCormick’s numbers got a boost from price and tariff refunds, which doesn’t say as much about consumer demand.
Nike NYSE:NKE is set to release fiscal Q4 earnings Tuesday after the bell. The call starts at 2 p.m. PT. Next week is a short one for the market, with both NYSE and Nasdaq closing Friday, July 3, for Independence Day. investors.nike.com
Jobs numbers are due out Thursday, which could set the tone for earnings. Doug Huber, deputy CIO at Wealth Enhancement, said if payrolls come in hot, it could raise rate-hike odds and “market’s not going to treat that as good news.” Julia Hermann at New York Life Investment Management said tech gains lately have been mostly about “memory-related equities.” Reuters
