Key Takeaways
- Micron (MU) shares have skyrocketed approximately 300% in the past year, climbing from the low-$60s to roughly $430, while maintaining a forward P/E ratio of only 12.4 — about 46% lower than the sector average.
- Analysts anticipate Micron’s fiscal 2026 revenue will reach $76 billion, representing a 103% year-over-year increase, while earnings per share are projected to surge to $33.92 — a fourfold jump.
- The entire 2026 supply of high-bandwidth memory (HBM) has been completely allocated, with certain hyperscale customers receiving just half their requested volumes.
- During Q1 2026, Micron’s Cloud Memory Business Unit achieved approximately 66% gross margins, while overall corporate gross margins are expected to reach ~68% in Q2.
- Should Micron’s valuation align with industry peers, market watchers believe the stock could climb to the mid-$600s or even low-$700s territory.
Micron Technology’s stock has achieved something remarkable: tripling in value while becoming more attractive from a valuation perspective.
Throughout the last year, MU has surged from approximately $60 to around $430. This represents a gain of roughly 300%. Despite this explosive growth, the forward non-GAAP P/E ratio has contracted to approximately 12.4 — nearly half the sector’s median valuation — because earnings projections have accelerated even more rapidly than share price appreciation.
The PEG ratio reinforces this narrative. Trading at roughly 0.21 compared to the sector median of approximately 1.5, the market appears to be pricing Micron as though its current expansion is unsustainable.
Analysts on Wall Street paint a different picture. Fiscal 2026 revenue projections stand at $76 billion, representing more than a 100% increase from the previous year. Earnings per share are anticipated to leap from $7.59 in fiscal 2025 to $33.92 in the current fiscal year — effectively quadrupling. Notably, every single analyst revision over the past three months — all 28 of them — has been upward.
For the second quarter of fiscal 2026, the consensus estimate centers around $18.7–$18.9 billion in revenue, representing approximately 135% growth compared to the year-ago quarter, with non-GAAP EPS projected near $8.50 — suggesting 445% year-over-year expansion.
Demand Vastly Outstrips Available Supply
The supply-demand dynamic is unambiguous. HBM inventory has been entirely committed through 2026 via fixed price and volume agreements. DDR5 spot market prices have climbed approximately 30% year-to-date, while DRAM and NAND contract pricing has increased by an additional 30% in early 2026.
Certain hyperscale customers are reportedly obtaining only 50% to 66% of their requested memory allocations. This situation provides Micron with substantial pricing leverage and the flexibility to prioritize supply allocation toward its most profitable customer segments.
The total addressable market for HBM alone stood at $35 billion in 2025 and is projected to expand at a 40% compound annual growth rate through 2028, positioning it to approach $100 billion by decade’s end.
Micron’s Cloud Memory Business Unit — encompassing HBM and premium data-center DRAM products — achieved gross margins near 66% during Q1 2026. Overall corporate gross margin reached 56.8% in Q1, with management projecting 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 the same period, Micron retired approximately $2.7 billion in debt obligations and executed roughly $300 million in share buybacks.
Extensive Capacity Expansion Plans
Micron has committed to investing approximately $200 billion in manufacturing capacity across the United States and allied nations over the extended term, including a planned $100 billion mega-fabrication facility in New York State. The company is simultaneously 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.
From a valuation standpoint, if Micron were to trade at a forward P/E of 20 — still meaningfully below the Nasdaq-100 average of 24.5 — the implied share price would approximate $660. Applying peer group EV/Sales and EV/EBITDA median multiples, the blended valuation suggests upside potential toward the low-$700s range.
The current consensus Wall Street price target clusters around $390, a level MU has already exceeded.
