A quarterly net profit of $35 billion could propel Micron Technology (MU.US) past Microsoft (MSFT.US) in earnings. Based on Micron's latest guidance, net profit for the fourth quarter of fiscal 2026 may reach approximately $35 billion. If this trajectory holds, its fiscal 2027 profit could exceed Microsoft's. However, this hinges on one critical assumption: memory prices must hold firm.

For Microsoft, the fiscal year ending June 30, 2026, stands as the software giant's strongest performance on record: revenue grew 18% to $331.8 billion, while net profit rose 31% year-over-year to $133.7 billion. Micron is approaching this benchmark through a distinctly different route. The memory chip maker reported net profit of $8.5 billion for fiscal 2025. Yet management's guidance for the fourth quarter of fiscal 2026 (ending early September) points to GAAP diluted EPS of $30.73, plus or minus $1.00. Based on roughly 1.15 billion diluted shares, that guidance translates to quarterly earnings of about $35 billion—nearly four times its entire prior fiscal year's profit.

The Motley Fool analyst Daniel Sparks predicts that by fiscal 2027, Micron's profit will surpass Microsoft's. This is a bold assertion that relies almost entirely on memory pricing. Micron's net profit for the second quarter of fiscal 2026 was $13.8 billion. By the third fiscal quarter (ending May 28, 2026), net profit had climbed to $28.2 billion. The latest guidance now indicates an additional gain of roughly 25% on top of that, marking a deceleration from the over 100% sequential surge seen in the prior quarter. Growth is slowing, but profit is still expanding.

Price, not volume, is the key driver. In Micron's most recent quarterly report, DRAM average selling prices rose more than 60% sequentially, while shipment volumes only grew in the low single digits. Gross margin jumped from 37.7% in the same period last year to 84.6% in the third fiscal quarter. In other words, the company's memory shipments barely inched up quarter-over-quarter, but prices surged dramatically.

Micron will report fourth-quarter results on September 30. Consensus estimates put revenue at $51.1 billion and EPS at $31.47 for the quarter. The two companies operate on different fiscal calendars. Microsoft's fiscal 2027 runs from July through next June; Micron's fiscal 2027 begins in early September and runs through roughly August next year. Based on the guidance pace, Micron's combined profit across four quarters would total approximately $141 billion. That would exceed Microsoft's fiscal 2026 profit—though it's worth noting that Microsoft's reported $133.7 billion includes roughly $5 billion in investment gains from OpenAI. But the true bar is higher.

First, Micron's quarterly guidance covers 14 weeks, not the usual 13, due to the 53-week fiscal 2026. Accounting for that extra week, the guidance annualizes to roughly $131 billion on a normal 52-week basis. Moreover, Microsoft won't stand still. Even if the tech company's profit growth slows to half of its fiscal 2026 pace of 31%, its fiscal 2027 profit could still reach around $154 billion. Taken together, for Micron to achieve this target in fiscal 2027, it would need to generate approximately $38 to $39 billion in average quarterly net profit—about 10% above the guided quarter—and with one fewer week on the calendar.

Memory prices are the true deciding factor. Micron doesn't need prices to skyrocket further to clear this hurdle. But prices do need to stay near record levels while the company also boosts volume. The firm is investing heavily to expand capacity and has signed multi-year take-or-pay agreements locking in customers for fixed quantities. Micron CEO Sanjay Mehrotra stated in the third-quarter earnings report: "We believe our multi-year strategic customer agreements will significantly enhance the durability and predictability of Micron's strong financial performance."

Of course, memory prices have moved in the opposite direction before. As recently as fiscal 2023, a supply glut cut Micron's revenue nearly in half to $15.5 billion and produced a net loss of $5.8 billion. Even a modest price decline could derail the entire forecast. Memory prices aren't the only factor to watch. Media reports from mid-September indicated that a union representing most Micron employees in Taiwan—its largest manufacturing hub—has been pushing for a profit-sharing plan and has been preparing for a potential strike. No strike has been initiated, and production remains unaffected.

Even so, The Motley Fool sees the odds favoring Micron. Prices don't need to rise further, but they must avoid a sharp collapse. Micron's latest quarterly filing states that most of these agreements carry fixed prices or price floors and ceilings, providing a buffer should prices fall. The Motley Fool believes that as long as memory prices hold, Micron's fiscal 2027 profit will edge past Microsoft's. But ultimately, this is an earnings comparison, not a stock recommendation. Microsoft's market value is roughly 3.5 times that of Micron, and the memory industry's profitability has historically been more volatile and less durable.