Q1 is the high-water mark. I model FY27 EPS of $129 and an 8 times peak-cycle multiple, which puts the stock near today's price rather than higher.
Key points
- $61.5 billion is Q1 FY27 revenue guidance, up 13% from Q4's $54.2 billion.
- More than 75% of FY27 bits are under customer agreements, yet only about 35% of bits through 2030.
- 8.4 times FY27 EPS of $129 is what $1,086.74 requires if my earnings path holds.
The call
The stock needs FY27 earnings near $129 a share and a multiple of about 8 times that figure just to sit still. Trailing four-quarter net income is already $85 billion, so the market is paying 14.7 times that run-rate, which only works if prices stay near today's spot.
I believe sequential revenue peaks in the December quarter and then eases as DRAM and NAND prices moderate. Mix and HBM help, but mobile bit declines already show demand destruction. An 8 times multiple on $129 of FY27 EPS is $1,034.
Quarterly revenue ($ billions)Company reports through Q4 FY26; Q1–Q4 FY27E are mine. As of Oct 8, 2026.
Valuation
| Item | Figure |
|---|
| FY27 revenue (mine) | $230 billion |
| Gross margin (mine, blended) | 80% |
| Net income after tax | $149 billion |
| Diluted shares | 1.15 billion |
| FY27 EPS (mine) | $129 |
| Multiple times FY27 EPS | 8.0 times |
| 12-month target | $1,034 |
Memory cycles rarely hold mid-teens earnings multiples at the price peak. Eight times peak EPS is still generous versus prior upcycles. Downside if prices crack is larger than upside if tightness lasts another year, which is why the rating is hold, not sell.
Gross margin %GAAP gross margin from SEC facts and Q4 release; my FY27 path. Oct 8, 2026.
Risks
- Hyperscaler agreements keep contract prices high through FY28, which would lift both earnings and the multiple.
- A Taiwan strike that idles Taoyuan would tighten supply further and delay the fade I model.
- Faster HBM4E ramps with NVIDIA could hold mix and margins above my 74% Q4 FY27 path.
What would change my mind
Q2 FY27 revenue and gross margin both beating Q1 would force me to raise the earnings path and the multiple.