Micron grew by $1 trillion this year. These two wild cards will determine its trajectory.

Analysts are watching Micron’s upcoming fiscal third-quarter earnings to see how far the company can sustain record profitability. Micron’s margins have surged as supply and demand for its memory chips are imbalanced, allowing price increases with limited extra cost. Wall Street expects a test of whether Micron can keep gross margins above 80% when it reports Wednesday after the market close, but Susquehanna analyst Mehdi Hosseini says the key question is operating margins—aiming for staying in the 70% to 75% range over coming quarters, potentially years. Hosseini models operating margins falling to 60% by end-2028 and points to two “wild cards.” One is key-value cache offloading, which can reduce memory usage during large AI models without changing overall memory needs, and may affect demand for DRAM and NAND, including triple-level and quad-level cell NAND. The second is timing of additional wafer capacity as supply shortages could persist through 2027. Hosseini expects annualized EPS of $160 in fiscal 2027 and targets $1,750 for the stock, noting Micron added over $1 trillion in market cap this year.