MU · Forward model · Core Data Center · Bull case
What has to happen in Core Data Center
Model as of
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Core Data Center
Basis quarter$11.52B
Final quarter$25.66B
Implied CAGR+17%
Final revenue mix25%
Conventional server DRAM and enterprise storage — the memory that goes into everything in the rack that is not an accelerator. Revenue went from $1.5B to $11.5B in four quarters on almost no volume growth, which tells you exactly what it is: price.
Last four quarters
2025 Q4
$1.58B
Reported
2026 Q1
$2.38B
Reported
2026 Q2
$5.69B
Reported
2026 Q3
$11.52B
Reported
Server DDR5 RDIMMsEnterprise and data centre SSDs (G9 NAND, PCIe Gen6)High-capacity QLC storageNetworking and infrastructure memory
Units
3100/qtr
growing +7.0% per quarter
3,100 PB in the basis quarter, backed out of $11.5B at an assumed $3.72/GB. Not a disclosed figure.
Price per unit
$4M
drifting +10.5% per quarter
$3.72M per PB, roughly $3.72/GB — a record contract price for conventional server DRAM.
Core Data Center
Latest: $25.66B (2031Q3E)
| Period | Value |
|---|---|
| 2025Q3 | $1.53B |
| 2025Q4 | $1.58B |
| 2026Q1 | $2.38B |
| 2026Q2 | $5.69B |
| 2026Q3 | $11.52B |
| 2026Q4E | $13.90B |
| 2027Q1E | $15.91B |
| 2027Q2E | $17.57B |
| 2027Q3E | $18.93B |
| 2027Q4E | $20.07B |
| 2028Q1E | $21.04B |
| 2028Q2E | $21.90B |
| 2028Q3E | $22.68B |
| 2028Q4E | $23.42B |
| 2029Q1E | $24.13B |
| 2029Q2E | $24.82B |
| 2029Q3E | $25.51B |
| 2029Q4E | $26.20B |
| 2030Q1E | $26.90B |
| 2030Q2E | $27.61B |
| 2030Q3E | $28.34B |
| 2030Q4E | $29.08B |
| 2031Q1E | $27.91B |
| 2031Q2E | $26.76B |
| 2031Q3E | $25.66B |
Assumptions & reasoning
- This is the line that reverts hardest, and it is still the line that grew from $1.5B to $11.5B in four quarters without a new product cycle. Gross margin went from 38% to 87% over that stretch, which is the definition of a price spike, and the price of a commodity that has spiked has exactly one long-run direction.
- Bits times price, with price up 10.5% a quarter at first and gliding to -6%. Revenue peaks in fiscal 2028 around $17-18B a quarter and then declines. The old model had this line falling from the first projected quarter, which put the whole company ~30% below the street for fiscal 2027 — that was the error, and it was an artefact of a price drift that could not change sign.
- The volume ceiling is 9,800 PB a quarter, a little over three times today's implied output, and the line reaches it near the end of the horizon. Wafer capacity Micron redirects into HBM cannot also serve this line — the two compete for the same fabs, and this is the one that loses when HBM is short.
- The first projected quarter is $48.0B of company revenue against Micron's own $50.0B guide — still about 4% light. A quarterly step this large is mostly contract resets landing on a specific date, and a smooth glide cannot reproduce a step. The gap is stated rather than tuned away.
- Terminal margin is 50%, raised from 38%, because 38% sat below the floor Micron describes: gross margins on the banded agreements are expected to be 'well above our peak quarterly margins in any past cycle' EVEN AT FLOOR PRICING, and the pre-AI peak was about 61%. Only part of the book is contracted, which is why this does not go higher.