Micron's NAND Business Surges: What's Behind the $2.7B Momentum?

Micron Technology MU just delivered impressive NAND revenue numbers—hitting $2.7 billion in Q1 FY2026 with a stunning 22% sequential surge. For context, NAND now accounts for a fifth of the company’s total revenue, signaling how critical this segment has become to the overall business.

The NAND Growth Story: More Than Just Numbers

The spike in NAND revenues isn’t random. It stems from a perfect storm of tight supply conditions, rising demand, and a favorable product mix that allowed Micron to both increase shipments and benefit from better pricing. Management is bullish, projecting 20% shipment growth for 2026 as the industry remains supply-constrained while demand keeps climbing.

The real driver? Micron’s next-generation G9 NAND, which is rapidly gaining traction across data center SSDs and client storage solutions. The company’s recent launch of the first PCIe Gen6 SSD—powered by this advanced NAND architecture—adds another layer to the growth narrative.

Data Center Dominance and AI’s Appetite for Storage

Here’s where things get interesting: Micron’s data center NAND revenues alone exceeded $1 billion in the first quarter, establishing this segment as a critical growth pillar. The momentum is expected to carry throughout fiscal 2026.

Artificial intelligence workloads are reshaping storage demands fundamentally. Micron has capitalized on this shift through its QLC NAND technology, particularly the G9 variant, which delivers both capacity and cost-efficiency for large-scale AI infrastructure. The company is currently ramping qualification for its 122TB and 245TB QLC G9 SSDs across multiple hyperscale data centers—a clear signal of confidence from major cloud operators.

Importantly, this isn’t a cyclical bounce. The storage demand tied to AI training, inference, and generative AI applications represents a structural shift in how data centers architect their infrastructure. NAND sits at the heart of this evolution.

Market Competition and Positioning

Micron operates in a competitive landscape where storage solutions command significant attention. Other players in the sector are also ramping up their focus on AI-driven storage, with some competitors reporting sequential data center revenue growth driven by similar hyperscaler and enterprise demand. Portfolio expansion and strategic partnerships remain key competitive tools across the industry.

Stock Performance and Market Valuation

The market has taken notice of Micron’s positioning. MU shares have climbed 142.1% over the past six months, substantially outpacing the broader Computer - Integrated Systems industry’s 51.1% gain.

From a valuation lens, Micron trades at a forward price-to-sales multiple of 4.33X, marginally above the industry average of 4.28X. The consensus estimates for fiscal 2026 earnings suggest year-over-year expansion of 278.3%, with recent analyst revisions pointing upward over the past month.

The Takeaway

Micron’s NAND business isn’t just posting impressive quarterly numbers—it’s riding a wave of structural demand powered by AI infrastructure buildout. With supply constraints favoring positioned players and next-gen NAND products entering qualification at major customers, the story appears far from over. Whether this translates to sustained shareholder value will depend on execution and how long the favorable supply-demand dynamics persist.