TLDR
- Micron (MU) stock has delivered approximately 300% returns over the past year, rising from $60 to nearly $430, yet maintains a forward P/E ratio of just 12.4 — roughly 46% lower than sector comparables.
- Wall Street expects Micron to deliver $76 billion in fiscal 2026 sales, marking a 103% year-over-year jump, with earnings per share forecast to quadruple to $33.92.
- High-bandwidth memory (HBM) production is fully allocated through 2026, with leading cloud customers receiving substantially less inventory than demanded.
- Micron’s Cloud Memory Business Unit posted approximately 66% gross margins in the first quarter of fiscal 2026, while company-wide margins are expected to hit ~68% in the second quarter.
- If Micron trades at valuation multiples consistent with industry standards, analyst models suggest price potential in the $600 to $700 range.
Micron Technology has accomplished something uncommon in equity investing: delivering triple-digit gains while simultaneously improving its fundamental value proposition.
Over the past twelve months, MU stock has climbed from approximately $60 to around $430. This translates to roughly 300% appreciation. Yet remarkably, the forward non-GAAP P/E ratio has compressed to about 12.4 — nearly half the sector average — because earnings forecasts have outpaced even the dramatic share price advance.
The PEG ratio tells a similar story. Trading at approximately 0.21 versus a sector median closer to 1.5, the market appears skeptical that Micron’s growth momentum can persist.
Analyst projections suggest otherwise. For fiscal 2026, revenue expectations stand at $76 billion, more than doubling the prior fiscal year’s results. Earnings per share are forecast to jump from $7.59 in fiscal 2025 to $33.92 in the current fiscal year — nearly quadrupling. Significantly, all 28 analyst revisions over the past three months have moved higher.
For fiscal 2026’s second quarter, consensus estimates center on $18.7–$18.9 billion in sales, approximately 135% higher year-over-year, with non-GAAP EPS projections around $8.50 — indicating 445% annual growth.
Supply Is the Constraint, Not Demand
The supply-demand equation is straightforward. HBM production is completely allocated through 2026 under locked pricing and volume contracts. DDR5 spot prices have risen approximately 30% year-to-date, while DRAM and NAND contract rates have increased another 30% in early 2026.
Some hyperscale clients are reportedly obtaining only half to two-thirds of their requested memory volumes. This situation grants Micron considerable pricing power and strategic discretion in directing supply toward higher-margin accounts.
The HBM addressable market reached $35 billion in 2025 and is forecast to grow at a 40% compound annual rate through 2028, potentially approaching $100 billion before 2030.
Micron’s Cloud Memory Business Unit — which includes HBM and premium data-center DRAM offerings — generated gross margins approaching 66% in the first quarter of fiscal 2026. Overall corporate gross margin reached 56.8% in Q1, with management projecting approximately 68% in Q2, reflecting an 11-percentage-point sequential gain.
Free cash flow margin hit nearly 30% in Q1 — a company milestone. During that same timeframe, Micron paid down roughly $2.7 billion in debt while repurchasing approximately $300 million in shares.
Long-Term Capacity Build
Micron has announced plans to invest approximately $200 billion in manufacturing infrastructure across the United States and partner nations over the coming years, featuring a proposed $100 billion mega-fabrication facility in New York. Other commitments include a $24 billion silicon-wafer manufacturing plant in Singapore and the purchase of DRAM production assets in Taiwan from Powerchip Semiconductor for roughly $1.8 billion.
These capital investments are partially supported by up to $6.1 billion in CHIPS Act funding and a 25% advanced manufacturing investment tax credit.
From a valuation standpoint, if Micron commanded a forward P/E of 20 — still well below the Nasdaq-100 average of 24.5 — the calculation points to a share price near $660. Using peer-group EV/Sales and EV/EBITDA median multiples, blended valuation frameworks indicate the low-$700 range.
The prevailing Wall Street consensus target hovers around $390, a level MU has already surpassed.
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