Mainly through higher memory prices, Micron says, driven by AI demand it describes as outpacing what the industry can supply. By mid-2026 Micron kept about $85 of gross profit from every $100 of sales, a level Nvidia did not reach in any of its quarters in this data, which starts in 2008. In early 2023, Micron's cost for the chips it sold, swollen by a write-down of chips still in stock, was bigger than its sales.

What is being measured

Gross margin is sales minus the cost of the goods sold, divided by sales. For these two companies that cost is mostly the cost of making what they sold : factory depreciation, labour, materials and overhead, plus charges such as write-downs of unsold chips. A 60% margin means $60 of every $100 of sales is left once those costs are counted.

It is not total profit : research, sales and admin costs, interest and tax come out later. Both companies' margins here are worked out the same way, from their reported (GAAP) figures.

The two are very different businesses. Micron, based in Idaho, makes memory : DRAM, the working memory in computers, phones and servers, and NAND, the storage in phones and solid-state drives. Nvidia designs graphics and AI processors and sells the systems built around them.

Why Micron's margin swings so hard

Micron's annual report for fiscal 2026 gives two reasons. Memory prices move a lot : over its past five fiscal years, the yearly change in its average DRAM and NAND prices ranged from a rise of about 200% to a fall of about 50%. Costs don't move in step. Micron runs its own chip plants, and says "a significant portion of our manufacturing costs are fixed". Making fewer chips raises the cost of each one.

Nvidia calls itself "a fabless semiconductor company" : it designs chips and pays others to make them. Its filings don't say how much of its steadier margin comes from that.

From 2011, where the chart starts, to the end of 2025, Micron was ahead of Nvidia in only three calendar quarters, two in a row in 2018 and one in 2022, each time by less than 4 percentage points. In 2022 it was Nvidia that fell : its annual report blames that fiscal year's lower gross margin mainly on $2.17bn of charges for excess inventory and for chips it had committed to buy but no longer expected to need (it doesn't break that down by quarter).

2023 : when Micron's costs topped its sales

Micron's report for the three months to 2 March 2023 says conditions had "deteriorated sharply". Customers were using up stock they had built up, and DRAM and NAND prices fell. Revenue was $3.69bn; the cost of the chips sold was $4.90bn. That is $133 of costs for every $100 of sales, a margin of −32.7%, the first of four quarters below zero. Micron cut production and equipment spending and said it expected to cut about 15% of its staff.

Much of that −32.7% is one accounting charge. Costs included a $1.43bn write-down of chips in stock : when Micron expects inventory to sell for less than it cost to make, it books the loss at once, before the chips are sold. Adding that charge back, our own simple calculation puts the quarter at about +6.1% : thin, but above zero. Because the loss was counted early, later sales looked better : Micron says its fiscal 2024 margin included a $987m benefit from selling chips written down during 2023.

In early 2023, Micron's costs were bigger than its sales · Micron's revenue and cost of chips sold, three months to 2 March 2023, $bn · Revenue · Cost of chips sold · $3.69bn · $4.90bn · Costs include a $1.43bn write-down of chips still in stock, booked before they were sold — Micron's revenue and cost of chips sold, three months to 2 March 2023, $bn

How Micron's margin climbed back

For its fiscal years, which end around 1 September, Micron reports gross margins of 22% for 2024, 40% for 2025 and 81% for 2026. For 2026 it gives prices as the main reason : average selling prices up about 180% for DRAM and about 200% for NAND from a year earlier. A better product mix and lower unit costs also lifted the margin.

Part of that mix is HBM (high-bandwidth memory), stacked DRAM made for AI systems. Micron says it takes more wafers and cleanroom space than ordinary DRAM to make the same amount of memory with the same generation of manufacturing technology. About 60% of Micron's fiscal 2026 revenue came from data centres.

"AI-driven memory and storage demand growth is outpacing industry supply," Micron says. That is the company's explanation. The margin data shows when the climb happened, not how much of it AI caused.

Micron's yearly gross margin went from 22% to 81% in two years · Micron's gross margin by fiscal year, % of sales · FY2024 · FY2025 · FY2026 · Micron · 81% · Micron's fiscal years end around 1 September ; Micron credits higher memory prices first — Micron's gross margin by fiscal year, % of sales

How far Micron is ahead of Nvidia, and how firmly

The two companies' quarters end on different dates, so the chart places each one in the calendar quarter it mostly covers. The latest pair overlaps by only 32 days : Micron's quarter to 28 May 2026 at 84.6%, and Nvidia's quarter to 26 July 2026 at 75.0%.

Micron's lead doesn't depend on that pairing, though. Micron's next quarter, to 3 September, came in at 86.8% (it ran 14 weeks, as Micron's fiscal year had 53 weeks). Both quarters beat 78.4%, Nvidia's best in this data, set in its quarter to April 2024.

Nvidia's own dip, to 60.5% in its quarter to April 2025, had two main causes, its quarterly report says : a $4.5bn charge for H20 chips and purchase commitments after the US government required a licence to sell them to China, and the early ramp of more complex data-centre systems.

Micron's last two quarters beat Nvidia's best · Gross margin by company quarter, % of sales · Micron, to 3 Sep 2026 · Micron, to 28 May 2026 · Nvidia's best, to Apr 2024 · Nvidia, to 26 Jul 2026 · 86.8% · 84.6% · 78.4% · 75.0% · The companies' quarters end on different dates ; Micron's quarter to 3 — Gross margin by company quarter, % of sales

What this does not show

A higher margin is not a bigger business. In its quarter to September, Micron had revenue of $54.2bn and gross profit of $47.0bn. Nvidia, in its quarter to July, had $96.2bn and $72.1bn. Micron's quarter ran a week longer, and Nvidia still brought in more dollars. In these latest quarters, Micron kept the bigger share of each sale, not the bigger total.

For now, the order also holds one step further down. Operating margin, which also takes out research, sales and admin costs and other operating items, was 80.7% in Micron's September quarter and 66.2% in Nvidia's July quarter.

Micron itself warns the peak may not last. Its annual report says that "as we and others increase supply, average selling prices may decline", and that in some past periods its prices "have been below our manufacturing costs". In the chart, each of Micron's earlier peaks, in 2014, 2018 and 2021, was followed by a fall. That is history, not a forecast.

Micron keeps a bigger share, Nvidia brings in more dollars · Gross profit and revenue in each company's latest quarter, $bn · Gross profit · Revenue · Micron, to Sep 2026 · Nvidia, to Jul 2026 · $47.0bn · $72.1bn · $54.2bn · $96.2bn · Micron's quarter to September ran a week longer than Nvidia's qua — Gross profit and revenue in each company's latest quarter, $bn

How the numbers were made

Revenue, gross profit and operating income come from the companies' filings with the US Securities and Exchange Commission, as reported under US accounting rules (GAAP); the one exception is our +6.1% add-back. A fourth quarter reported only inside the annual total is the year minus the first three quarters. Reasons, charges and price changes come from the filed reports below.

This piece explains how gross margins work using two companies' published results. It is not investment advice.