4 Frontier Releases & Market Irrationality

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THEWHITEBOX

TLDR;

Welcome back! My apologies for the late send this week. I’ve been advising JPMorgan on an upcoming report I can’t quite talk about yet, which means you’ll soon see ‘TheWhiteBox’ mentioned in a report read by millions!

However, in case you aren’t familiar with how investment bankers handle work, this has had me fighting for every inch of schedule to write this newsletter.

This was an extraordinary situation, don’t worry, but one you’re benefiting from, as I’ll share the analysis with you guys in this newsletter shortly.

Beyond that, we cover several interesting topics, like Google’s impressive Gemini 3 Flash and FunctionGemma releases, Oracle’s late struggles, Micron’s blowout earnings, OpenAI’s release of gpt-image 1.5, and more.

Enjoy!

MEMORY

Micron’s Insane Earnings Shock Everyone

Micron, one of three companies building high-bandwidth memory chips, or HBM, which have become crucial for AI accelerators like NVIDIA’s GPUs, held its earnings call for fiscal Q1 2026 (quarter ended November 27, 2025), and it was a total success, to the point that Morgan Stanley called it “the best revenue/net income upside in the history of US semiconductors.”

The company posted record revenue of $13.64B (up from $11.32B in the prior quarter and $8.71B a year ago).

GAAP net income was $5.24B (GAAP EPS $4.60), and non-GAAP net income was $5.48B (non-GAAP EPS $4.78).

Non-GAAP gross margin expanded to 56.8% (56.0% GAAP), and operating cash flow was $8.41B; Micron highlighted “highest ever” free cash flow, with adjusted free cash flow of $3.9B and capex of $4.5B in the quarter.

GAAP refers to Generally Accepted Accounting Principles, the standard framework of rules, standards, and procedures for financial reporting in the US. Whenever you see ‘non-GAAP something’ or ‘adjusted something’, like ‘adjusted free cash flow’ that is the company giving the metric not based on GAAP but on what they believe better reflects the metric from the company’s perspective.

In a nutshell, this company is printing money, and 2026, its potential breakout year, hasn’t even started.

Moreover, the guidance was perhaps even more impressive. Guidance for fiscal Q2 2026 was notably above typical Street expectations: revenue of $18.70 ± $0.40 billion, non-GAAP gross margin of 68.0% ± 1.0%, and non-GAAP EPS of $8.42 ± $0.20 (the analyst consensus was below $5, an absurd beat!).

TheWhiteBox’s takeaway:

When I say these results have “shocked everyone”, if you’re a regular of this newsletter, you shouldn’t be shocked at all.

We’ve been calling the arrival of the memory supercycle for months already, and even heavily invested in one of the top three DRAM companies (SK Hynix, Samsung, and Micron), predicting a great 2026 for them (a great year for all three, actually).

MONEY MARKETS

Oracle, AI’s Elephant in the room?

In the absence of public AI Labs, Oracle might be the biggest proxy for investor sentiment toward AI right now. And once you see the news coming out of Oracle, you will understand.

But first, have you ever wondered why AI data centers are getting so…

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