Micron’s gross margin is 84.9%—at first glance I thought I misread the number.

A memory-chip company that has gross margins outperforming most software companies. Even in the best years of the traditional DRAM cycle, it was only around 40–50%. So what does 84.9% mean now?
HBM is no longer being sold as memory—it’s being sold as a scarce resource. On the supply side, only a handful of firms can make it; on the demand side, it’s a must-have accessory for cards like Nvidia H100/B200. Micron doesn’t need to haggle—pricing power is in its hands $MU
This directly slaps in the face the “rotation” narrative people have been talking about all week: “Money flows from chip-selling companies to chip-using companies.” The Philadelphia semiconductor index has fallen for a week, and everyone says the storage-chip story is over. But Micron’s latest earnings report says the story isn’t finished, and its profit margins are still setting records. The market’s rotation call may have moved too fast
Oracle raises another $20 billion in funding—this news is even more interesting at today’s timing. Over the past two years, the scale of Oracle’s AI infrastructure spending has been underestimated. They’re not as loud as Microsoft or Google, but the pace of data-center expansion hasn’t slowed $ORCL
This new $20 billion financing will most likely go into AI compute and storage. In other words, some of Micron’s 84.9% gross margin is effectively paid in those bills from Oracle
Upstream pricing power is with Micron; downstream demand is with Oracle; in the middle, Nvidia GPUs connect the two ends. In this AI infrastructure value chain, every segment is making a lot of money right now—no part is being squeezed out
This is very different from past tech cycles. Back then, hardware was a tough business and software took the lion’s share. Now, in the AI scenario, the hardware layer has regained pricing power
The only question is sustainability. A gross margin of 84.9% is built on the premise that HBM production capacity is extremely scarce. Once SK hynix and Samsung’s HBM capacity ramps up and catches pace, which direction will this number move? Worth watching
DYOR. Not investment advice