Key Takeaways
- Micron (MU) shares have skyrocketed approximately 300% in twelve months, climbing from around $60 to roughly $430, while its forward P/E remains at a modest 12.4 — about 46% beneath the industry median.
- Analysts project Micron’s fiscal 2026 revenue will reach $76 billion, representing a 103% year-over-year increase, while EPS is expected to climb fourfold to $33.92.
- The entire supply of high-bandwidth memory (HBM) for 2026 is completely allocated, leaving some major cloud providers with just 50% of their required memory capacity.
- In Q1 fiscal 2026, Micron’s Cloud Memory Business Unit achieved gross margins of approximately 66%, while overall corporate gross margins are projected at ~68% for Q2.
- Should Micron’s valuation multiples align with industry peers, analysts believe the stock could trade in the mid-$600 to low-$700 territory.
Micron Technology shares have accomplished something remarkable: the stock price tripled while the valuation actually became more attractive.
Throughout the last year, MU shares have surged from approximately $60 to the $430 level. This represents an impressive gain of roughly 300%. However, the forward non-GAAP P/E ratio has contracted to approximately 12.4 — close to half the sector’s median figure — due to earnings projections accelerating faster than share price appreciation.
The PEG ratio reinforces this narrative. Trading at roughly 0.21, compared to a sector median approaching 1.5, the market appears to be valuing Micron as though its expansion trajectory is unsustainable.
Analysts on Wall Street see things differently, at least in the near term. Fiscal 2026 revenue projections stand at $76 billion, representing more than a doubling from the previous fiscal year. EPS estimates call for a jump from $7.59 in fiscal 2025 to $33.92 for the current year — nearly a fourfold increase. During the last ninety days, every one of the 28 analyst estimate revisions has been an upward adjustment.
For the second quarter of fiscal 2026, the consensus forecast centers around $18.7–$18.9 billion in revenue, approximately 135% higher than the comparable period last year, with non-GAAP EPS near $8.50 — translating to 445% year-over-year expansion.
Demand Outstrips Available Supply
The supply-demand dynamics are crystal clear. HBM production capacity is completely allocated through 2026 under fixed-price, fixed-volume agreements. DDR5 spot market prices have climbed approximately 30% year-to-date, while DRAM and NAND contract pricing has increased an additional 30% in early 2026.
Certain hyperscale cloud operators are reportedly obtaining only 50% to 66% of their requested memory volumes. This situation provides Micron with significant pricing leverage and the flexibility to prioritize allocation toward its most profitable customer segments.
The addressable market for HBM alone stood at $35 billion in 2025 and is projected to expand at a 40% compound annual rate through 2028, positioning it to approach $100 billion before the decade concludes.
Micron’s Cloud Memory Business Unit — encompassing HBM and high-end data-center DRAM — delivered gross margins approaching 66% in the first quarter of fiscal 2026. Overall corporate gross margin reached 56.8% in Q1, with management providing guidance of approximately 68% for Q2, representing an 11-percentage-point sequential improvement.
Free cash flow margin reached nearly 30% in Q1 — establishing a company record. During that same period, Micron reduced debt by approximately $2.7 billion and executed roughly $300 million in share buybacks.
Expansion of Production Footprint
Micron has outlined plans for approximately $200 billion in manufacturing investments across the United States and allied nations over the long term, including a proposed $100 billion mega-fabrication facility complex in New York State. Additionally, the company is constructing a $24 billion silicon-wafer manufacturing plant in Singapore and acquiring DRAM production facilities in Taiwan from Powerchip Semiconductor for approximately $1.8 billion.
These capital expenditures are partially subsidized through up to $6.1 billion in CHIPS Act grants and a 25% advanced manufacturing investment tax credit.
Regarding valuation scenarios, if Micron were to trade at a forward P/E of 20 — still substantially below the Nasdaq-100 average of 24.5 — the implied share price would be approximately $660. Applying peer group EV/Sales and EV/EBITDA median multiples, the blended valuation target points toward the low-$700 range.
The current consensus Wall Street price target cluster hovers around $390, a level MU has already exceeded.
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