Key Highlights
- Micron (MU) stock has surged roughly 300% over the past year, jumping from approximately $60 to nearly $430, yet its forward P/E ratio stands at just 12.4 — roughly 46% below the sector average.
- Wall Street forecasts Micron will deliver $76 billion in revenue for fiscal 2026, marking a 103% year-over-year jump, with earnings per share expected to quadruple to $33.92.
- High-bandwidth memory (HBM) capacity is fully allocated through 2026, with major hyperscalers receiving substantially less inventory than they’ve requested.
- Micron’s Cloud Memory Business Unit posted approximately 66% gross margins in the first quarter of fiscal 2026, while company-wide margins are projected to hit ~68% in Q2.
- If Micron’s valuation multiples expand to match industry standards, analyst models suggest price targets could reach the mid-$600s to low-$700s.
Micron Technology has accomplished something unusual in today’s markets: posting triple-digit percentage returns while simultaneously improving its fundamental valuation profile.
Over the last twelve months, MU stock has climbed from roughly $60 to approximately $430 — a gain of about 300%. Yet remarkably, the forward non-GAAP P/E multiple has compressed to around 12.4 — nearly half the sector average — as earnings forecasts have outpaced even the dramatic share price appreciation.
The PEG ratio tells a compelling story. Trading at approximately 0.21 versus a sector median near 1.5, the market seems skeptical about whether Micron can sustain its growth momentum.
Wall Street analysts tell a different story. Revenue estimates for fiscal 2026 point to $76 billion, more than double the prior fiscal year’s results. Earnings per share are forecast to jump from $7.59 in fiscal 2025 to $33.92 this year — nearly quadrupling. Significantly, all 28 analyst revisions over the last three months have moved higher — without exception.
For fiscal 2026’s second quarter, analyst consensus anticipates revenue between $18.7 billion and $18.9 billion, approximately 135% higher than the comparable period last year, with non-GAAP EPS forecasts around $8.50 — implying 445% year-over-year growth.
Demand Outstrips Available Supply
The supply-demand equation couldn’t be clearer. HBM production is fully contracted through 2026 under fixed-price, fixed-volume arrangements. DDR5 spot pricing has jumped roughly 30% year-to-date, while DRAM and NAND contract prices have risen another 30% in early 2026.
Some hyperscale cloud providers are reportedly receiving just 50% to 67% of their requested memory volumes. This imbalance gives Micron considerable pricing power and the ability to strategically allocate supply to high-margin customers.
The HBM addressable market reached $35 billion in 2025 and is expected to grow at a 40% compound annual rate through 2028, potentially approaching $100 billion by decade’s end.
Micron’s Cloud Memory Business Unit — which includes HBM and premium data-center DRAM — achieved gross margins approaching 66% in the first quarter of fiscal 2026. Overall corporate gross margin hit 56.8% in Q1, with management projecting approximately 68% for Q2, representing an 11-point sequential jump.
Free cash flow margin reached nearly 30% in Q1 — a company record. During the same quarter, Micron paid down roughly $2.7 billion in debt while repurchasing approximately $300 million worth of shares.
Massive Capacity Investments Underway
Micron has committed to investing approximately $200 billion in manufacturing capacity across the United States and allied countries over the long term, including a planned $100 billion mega-fab complex in New York State. Other investments encompass a $24 billion silicon-wafer facility in Singapore and the purchase of DRAM manufacturing 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 traded at a forward P/E of 20 — still below the Nasdaq-100 average of 24.5 — the calculation suggests a share price around $660. Using median peer-group EV/Sales and EV/EBITDA multiples, blended valuation approaches indicate the low-$700 range.
The current Wall Street consensus price target sits around $390, a threshold MU has already surpassed.
